Indexed bonds, Financial Management

In indexed bonds, the principal and coupon payments are linked to the market index like inflation and price index. Index bonds are attractive to investors as they are safer than the conventional bonds in terms of real interest rate risk and inflation expectation risk. Indexed bonds, apart from providing safety to investors, also provide a steady interest income from investment while keeping the principal intact. Because both coupon and principal payments of an indexed bond are adjusted for inflation, an investor can count on the steady purchasing power provided by the coupon interest payment during the life of the bond. Further, when an indexed bond matures, its principal has the same purchasing power as when it was invested. 

Posted Date: 9/8/2012 4:33:34 AM | Location : United States







Related Discussions:- Indexed bonds, Assignment Help, Ask Question on Indexed bonds, Get Answer, Expert's Help, Indexed bonds Discussions

Write discussion on Indexed bonds
Your posts are moderated
Related Questions
Market Value Ratios Price-Earnings Ratio P/E ratio shows how much investors are willing to pay for earnings per share of the company. Market-to-Bo

Above the line deductions are certain kinds of deductions that are deducted from your income before the adjusted gross income is computed for tax purposes. Above the line deduct

Explain the implications of purchasing power parity for operating exposure. Answer: Determine if the exchange rate changes are matched by the inflation rate differential among

Define country risk. How is it different from political risk? Country risk is a broader quantify of risk as compared to the political risk, as the former encompasses political ri

On Completion of her introductory finance course, Kieran was so pleased with the amount of useful and interesting knowledge she gained that she convinced her parents, who were weal

• Debtors :- Working Capital tied up in debtors must be estimated on the basis of cost of sales (excluding depreciation): [Cost of goods produces (that is raw materials + wages


What are the types of theft threats?  Describe the methods to access and overcome theft threats. Types of theft threats - Mass theft, Pilferage theft. Steps to assess threats

Scenario:  ABC Company sells widgets in three varieties (blue, red, and yellow) but has lost money for the past three years.  Competitive intelligence shows the Company's products

Do you provide help in college level Managerial Finance?