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 Bonds

The debt segment of secondary market which mainly comprises of bonds.

Bond: - A bond is simply a form of loan borrowed by the government, the municipality or a company. A bond purchaser who plays the role of a lender to such borrower institutions holds in return a negotiable certificate that acknowledges indebtedness of the bond issuer. Such certificates are also termed as bonds. Bonds normally are unsecured. The issuer pays the bond holder periodic interest ranging over the life of the loan.

The secondary market for bonds in India is an over the counter market whereas the market for equities is a system-automated market. The buy orders and sell orders are electronically matched. We shall delve deeper into this in the following chapters.
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What Are The Various Types Of Bonds?
Zero Coupon Bond: These are issued at a discount to the face value and at the time of redemption the bond holder is reimbursed with the face value of the bond.

The difference between the issue price and redemption price represents the return to the holder. The holder of such bonds does not enjoy periodic interest payments.

Convertible Bond: These bonds offer the investor the option to convert the bond into equity at a fixed conversion price

Treasury Bills: - T-bills are short-term securities issued by the Government. They mature in one year or less time from their issue date.






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