Chapter Summaries
9.1 Identify the key features of bonds and describe the difference between private and public debt markets. (pgs. 256–265)
Summary:
The basic features of a bond include what its maturity is, how the interest is determined (whether the rate of interest is fixed or floating), and how principal is repaid.
The private debt market consists of private loan transactions between a borrower and one or more lending institutions such as commercial banks and finance companies. Debt raised in the public market consists of one borrower and potentially many lenders, including any individual or institution with money to lend. The key distinction between these two markets is that public market transactions are regulated by the Securities ...
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