Debt Market
An
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On
Instruments Of Debt Market
Submitted to: Submitted By: Mrs. Gitanjali Gupta Sumeet Luhach
Asst. Professor B.B.A. 3rd Sem.
KAIM Roll No. 1125
[pic]
[pic]
CHARKHI DADRI
Affiliated to M.D.U. Rohtak.
Debt Market
Debt market refers to the financial market where investors buy and sell debt securities, mostly in the form of bonds. These markets are important source of funds, especially in a developing economy like India. India debt market is one of the largest in Asia. Like all other countries, debt market in India is also considered a useful substitute to banking channels for finance.
The most distinguishing feature of the debt instruments of Indian debt market is that the return is fixed. This means, returns are almost risk-free. This fixed return on the bond is often termed as the 'coupon rate' or the 'interest rate'. Therefore, the buyer (of bond) is giving the seller a loan at a fixed interest rate, which equals to the coupon rate.
Debt instruments are hard copy or electronic documents that commit the issuer to repaying a lender according to the terms and conditions of a contract. Classic examples of debt instruments allow the issuer to raise money with this type of financial arrangement, often for the purpose of funding a project or retiring one or more debts. Businesses and individuals may lend and borrow using a debt instrument as the document that gives form to the obligation.
Characteristics of Debt Market
1. Trading in long term debt instruments 2. Regulations by SEBI and RBI 3. Fixed Income 4. Segmentation 5. Direct Trading 6. Different participants 7. Diversified Market 8. Variety of instruments.
Importance of Debt Market
1. Debt market provides a higher liquidity in the market 2. Financing the development activities of the government 3. Implementation of monetary policy 4. Low borrowing cost 5. Less risk
[pic]
On
Instruments Of Debt Market
Submitted to: Submitted By: Mrs. Gitanjali Gupta Sumeet Luhach
Asst. Professor B.B.A. 3rd Sem.
KAIM Roll No. 1125
[pic]
[pic]
CHARKHI DADRI
Affiliated to M.D.U. Rohtak.
Debt Market
Debt market refers to the financial market where investors buy and sell debt securities, mostly in the form of bonds. These markets are important source of funds, especially in a developing economy like India. India debt market is one of the largest in Asia. Like all other countries, debt market in India is also considered a useful substitute to banking channels for finance.
The most distinguishing feature of the debt instruments of Indian debt market is that the return is fixed. This means, returns are almost risk-free. This fixed return on the bond is often termed as the 'coupon rate' or the 'interest rate'. Therefore, the buyer (of bond) is giving the seller a loan at a fixed interest rate, which equals to the coupon rate.
Debt instruments are hard copy or electronic documents that commit the issuer to repaying a lender according to the terms and conditions of a contract. Classic examples of debt instruments allow the issuer to raise money with this type of financial arrangement, often for the purpose of funding a project or retiring one or more debts. Businesses and individuals may lend and borrow using a debt instrument as the document that gives form to the obligation.
Characteristics of Debt Market
1. Trading in long term debt instruments 2. Regulations by SEBI and RBI 3. Fixed Income 4. Segmentation 5. Direct Trading 6. Different participants 7. Diversified Market 8. Variety of instruments.
Importance of Debt Market
1. Debt market provides a higher liquidity in the market 2. Financing the development activities of the government 3. Implementation of monetary policy 4. Low borrowing cost 5. Less risk