Bond markets and legal aspects of bonds. For government debt use the tag "government debt" unless the fact the the debt is in the form of bonds has significance.

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Show that $W_t - \int_0^t \xi_s ds$ is ${\mathbb Q}$-Brownian

Let $(\Omega, \mathscr F, \{\mathscr F_t\}_{t \in [0,T]}, \mathbb P)$ be a filtered probability space where $$T > 0$$ $\mathbb P = \tilde{\mathbb P}$ (risk-neutral measure) $$\mathscr F_t = ...
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60 views

Fannie Mae and Freddie Mac as substitute benchmark bonds

"The reduction seen in US government debt in the late 1990s has led to a redution in the supply of intermediate and long-term government bonds, and some concern has arisen over this fact. In the ...
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1answer
41 views

Why aren't perpetual bonds more common?

Most government bonds and corporate bonds have a maturity date when the principal must be repaid. While the few percents of interest every year is generally not a big problem to pay out, when a bond ...
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1answer
22 views

Bond market vs stock market during crisis

Why does bond market not change as much as the stock market during financial crisis? On the picture we see the development of the two markets
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Finance/Fixed Income Sec: development of UK bond markets relative to the stock market

I am asked to describe (school project in the course Fixed Income Securities) the development of the UK bond markets relative the UK stock market and I am not sure how to tackle it. I want to compare ...
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11 views

Data source for a corporate bond yield curve?

Yield curves are a valuable tool for economic analysis. It is particularly interesting to analyse the difference between Government Debt yields and Corporate Debt yields (credit spreads). This gives ...
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1answer
54 views

Why is the Bank of Japan buying all the government bonds?

I've recently read that the Bank of Japan is continuously buying government bonds. Apparently, at the rate they are going, the BoC will own all the bonds by 2026, which means the government will ...
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15 views

negative interest rate lending ripple effects

I was attempt to describe the ramifications of negative interest rates across benchmarks. I can foresee the business practice changes amongst holders of government bonds, savings accounts, ...
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1answer
32 views

What happens to undated government stocks when interest rates dip below the coupon rate?

What happens to undated government stocks (debt— known as "bonds" in the US) which pay a coupon and have an embedded call option, when interest rates dip below the coupon rate? Will the market value ...
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22 views

Why can principal not be lost, if a bond fund is held for a period equal to its duration?

[Source:] Which leads us to the key message for investors: as long as your time horizon is at least as long as the duration of your bond fund, you won’t lose any capital. You’ve probably heard ...
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How do bonds with higher yields, help offset declines in bond prices?

[Source:] Another often overlooked point is that rising interest rates have a silver lining: $\color{green} { \text {new bonds are issued with higher coupons} }$, and this will eventually lead to ...
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What is the difference between present value and face value?

What is the difference between present value and face value? When I search this question on Google is says they're the same in some cases and different in others. It says they are the same when the ...
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35 views

How did downgrading bonds contribute to Greek crisis?

According to an article I read, one of the steps that was used to contribute to the Greek downfall was that bankers downgraded the bonds of the country. This immediately makes the interest rates ...
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38 views

Regulatory differences between stocks and bonds

If you buy stocks of a company you are buying a share in that business. If you buy bonds from the same company you are essentially loaning them money for future payment. I am guessing (correct me if ...
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78 views

Government bonds - the most simple example

I would like to have an example of a common case of buying government bonds. (Wikipedia: it is issued generally with a promise to pay periodic interest payments and to repay the face value on the ...