What Is the Preferred Habitat Theory?

The Preferred Habitat Theory is an investment theory that suggests that investors have a preference for investing in assets that are located in their home country. This theory is based on the idea that investors are more familiar with the political and economic conditions of their home country, and as a result, they feel more … Read more

Collateralized Bond Obligation (CBO) Definition.

A collateralized bond obligation (CBO) is a type of structured finance security. It is created by pooling together a group of bonds and other debt instruments, and then dividing the resulting pool into tranches. The bonds in the pool serve as collateral for the CBO. The CBO structure allows the issuer to sell different tranches … Read more

What Is Warehousing?

Warehousing is the process of holding a security or commodity in inventory in order to sell it at a later date. A security or commodity may be warehoused for a number of reasons, such as to meet future customer demand or to take advantage of seasonal price fluctuations. In the case of commodities, warehousing may … Read more

What Is a Secured Bond?

A secured bond is a type of debt instrument that is backed by some form of collateral. This collateral can take the form of real estate, cash, or other assets. The key feature of a secured bond is that the issuer has the right to seize the collateral if the borrower defaults on the loan. … Read more

War Bonds.

A war bond is a debt security issued by a government to finance military operations during wartime. War bonds are usually issued in denominations of $25, $50, $100, $500, and $1,000, and typically have maturities of 10 to 40 years. Interest on war bonds is usually lower than that of other government bonds, because the … Read more

Index-Linked Bond Definition.

An index-linked bond is a debt security whose interest payments are linked to a specific index, typically a consumer price index (CPI). The principal value of the bond is also indexed to the CPI, so that it retains its real value over time. Index-linked bonds are issued by governments as a way to hedge against … Read more

What is a AAA credit rating?

A credit rating is an assessment of the creditworthiness of a borrower in general terms or with respect to a particular debt or financial obligation. A credit rating is typically issued by a credit rating agency, which uses a standardized rating system to assess the creditworthiness of a borrower. The AAA credit rating is the … Read more

The Bond Market: Everything You Need to Know.

The Bond Market: Everything You Need to Know What is bond market example? A bond market is a market in which bonds are traded. Bonds are debt securities that are issued by governments and corporations in order to raise capital. The bond market is used by investors to buy and sell bonds, and by issuers … Read more

Par Value Definition.

Par value is the face value of a bond or other fixed-income security. This is the amount that the issuer agrees to pay the holder at maturity, assuming that all interest payments have been made on time. The term is also used more generally to refer to the original value of an asset, even if … Read more