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Government Bond
A government bond or sovereign bond is a form of bond issued by a government to support public spending. It generally includes a commitment to pay periodic interest, called coupon payments'','' and to repay the face value on the maturity date. For example, a bondholder invests $20,000, called face value or principal, into a 10-year government bond with a 10% annual coupon; the government would pay the bondholder 10% interest each year and repay the $20,000 original face value at the date of maturity (i.e. after 10 years). Government bonds can be denominated in a foreign currency or the government's domestic currency. Countries with less stable economies tend to denominate their bonds in the currency of a country with a more stable economy (i.e. a hard currency). When governments with less stable economies issue bonds, there is a possibility they will be unable to repay bondholders, resulting in a default. All bonds carry a default risk. International credit rating agencie ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
1976 $5000 8% Treasury Note
Events January * January 3 – The International Covenant on Economic, Social and Cultural Rights enters into force. * January 5 – The Pol Pot regime proclaims a new constitution for Democratic Kampuchea. * January 11 – The 1976 Philadelphia Flyers–Red Army game results in a 4–1 victory for the National Hockey League's Philadelphia Flyers over HC CSKA Moscow of the Soviet Union. * January 16 – The trial against jailed members of the Red Army Faction (the West German extreme-left militant Baader–Meinhof Group) begins in Stuttgart. * January 18 ** Full diplomatic relations are established between Bangladesh and Pakistan 5 years after the Bangladesh Liberation War. ** The Scottish Labour Party (1976), Scottish Labour Party is formed as a breakaway from the UK-wide party. ** Super Bowl X in American football: The Pittsburgh Steelers defeat the Dallas Cowboys, 21–17, in Miami. * January 21 – First commercial Concorde flight, from London to Bahrain. * January 27 ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Stadtholder
In the Low Countries, ''stadtholder'' ( nl, stadhouder ) was an office of steward, designated a medieval official and then a national leader. The ''stadtholder'' was the replacement of the duke or count of a province during the Burgundian and Habsburg period (1384 – 1581/1795). The title was used for the official tasked with maintaining peace and provincial order in the early Dutch Republic and, at times, became ''de facto'' head of state of the Dutch Republic during the 16th to 18th centuries, which was an effectively hereditary role. For the last half century of its existence, it became an officially hereditary role under Prince William IV of Orange. His son, Prince William V, was the last ''stadtholder'' of the republic, whose own son, William I of the Netherlands, became the first sovereign king of the United Kingdom of the Netherlands. The title ''stadtholder'' is roughly comparable to the historical titles of Lord Protector in England, Statthalter in the Holy Roman ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Rate Risk
In finance, rate risk is the risk of losses caused by interest rate changes. The prices of most financial instruments, such as stocks and bonds move inversely with interest rates, so investors are subject to capital loss when rates rise. In the investment world, there are two types of risk rating. One is to manifest company's credit and another to equity securities. The former is represented by the systems of Fitch Ratings, Moody's and Standard & Poor's S&P Global Ratings (previously Standard & Poor's and informally known as S&P) is an American credit rating agency (CRA) and a division of S&P Global that publishes financial research and analysis on stocks, bonds, and commodities. S&P is con ... whereas the later by that of Comisión Clasificadora de Riesgo, although the two types have some similarities to some extent. Financial economics Market risk Interest rates {{Econ-stub ru:Риск процентной ставки ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Market Risk
Market risk is the risk of losses in positions arising from movements in market variables like prices and volatility. There is no unique classification as each classification may refer to different aspects of market risk. Nevertheless, the most commonly used types of market risk are: * '' Equity risk'', the risk that stock or stock indices (e.g. Euro Stoxx 50, etc.) prices or their implied volatility will change. * '' Interest rate risk'', the risk that interest rates (e.g. Libor, Euribor, etc.) or their implied volatility will change. * '' Currency risk'', the risk that foreign exchange rates (e.g. EUR/USD, EUR/GBP, etc.) or their implied volatility will change. * '' Commodity risk'', the risk that commodity prices (e.g. corn, crude oil) or their implied volatility will change. * ''Margining risk'' results from uncertain future cash outflows due to margin calls covering adverse value changes of a given position. * ''Shape risk'' * '' Holding period risk'' * '' Basis risk'' ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Series I Bonds
United States savings bonds are debt securities issued by the United States Department of the Treasury to help pay for the U.S. government's borrowing needs. U.S. savings bonds are considered one of the safest investments because they are backed by the full faith and credit of the United States government. The savings bonds are nonmarketable treasury securities issued to the public, which means they cannot be traded on secondary markets or otherwise transferable. They are redeemable only by the original purchaser, a recipient (for bonds purchased as gifts) or a beneficiary in case of the original holder's death. History On February 1, 1935, President Franklin D. Roosevelt signed legislation that allowed the U.S. Department of the Treasury to sell a new type of security, called the savings bond, to encourage saving during the Great Depression. The first Series A savings bond was issued a month later, with a face value of $25. They were marketed as a safe investment that was ac ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Inflation-indexed Bond
Daily inflation-indexed bonds (also known as inflation-linked bonds or colloquially as linkers) are bonds where the principal is indexed to inflation or deflation on a daily basis. They are thus designed to hedge the inflation risk of a bond. The first known inflation-indexed bond was issued by the Massachusetts Bay Company in 1780. The market has grown dramatically since the British government began issuing inflation-linked Gilts in 1981. As of 2019, government-issued inflation-linked bonds comprise over $3.1 trillion of the international debt market. The inflation-linked market primarily consists of sovereign bonds, with privately issued inflation-linked bonds constituting a small portion of the market. Structure Daily inflation-indexed bonds pay a periodic coupon that is equal to the product of the principal and the nominal coupon rate. For some bonds, such as in the case of TIPS, the underlying principal of the bond changes, which results in a higher interest payment w ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Inflation
In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduction in the purchasing power of money. The opposite of inflation is deflation, a sustained decrease in the general price level of goods and services. The common measure of inflation is the inflation rate, the annualized percentage change in a general price index. As prices do not all increase at the same rate, the consumer price index (CPI) is often used for this purpose. The employment cost index is also used for wages in the United States. Most economists agree that high levels of inflation as well as hyperinflation—which have severely disruptive effects on the real economy—are caused by persistent excessive growth in the money supply. Views on low to moderate rates of inflation are more varied. Low or moderate inflation may be ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Nationally Recognized Statistical Rating Organization
A nationally recognized statistical rating organization (NRSRO) is a credit rating agency (CRA) approved by the U.S. Securities and Exchange Commission (SEC) to provide information that financial firms must rely on for certain regulatory purposes. History The use of the term NRSRO began in 1975 when the SEC promulgated rules regarding bank and broker-dealer net capital requirements (). Prior to 1975, the SEC did not adopt specific standards for determining which credit rating agencies were "nationally recognized", and instead addressed the question on a case-by-case basis. NRSRO recognition was granted by the SEC through a "No Action Letter" sent by the SEC staff. Under this approach, if a CRA (or investment bank or broker-dealer) were interested in using the ratings from a particular CRA for regulatory purposes, the SEC staff would research the market to determine whether ratings from that particular CRA were widely used and considered "reliable and credible." If the SEC sta ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
National Bankruptcy
A sovereign default is the failure or refusal of the government of a sovereign state to pay back its debt in full when due. Cessation of due payments (or receivables) may either be accompanied by that government's formal declaration that it will not pay (or only partially pay) its debts (repudiation), or it may be unannounced. A credit rating agency will take into account in its gradings capital, interest, extraneous and procedural defaults, and failures to abide by the terms of bonds or other debt instruments. Countries have at times escaped some of the real burden of their debt through inflation. This is not "default" in the usual sense because the debt is honored, albeit with currency of lesser real value. Sometimes governments devalue their currency. This can be done by printing more money to apply toward their own debts, or by ending or altering the convertibility of their currencies into precious metals or foreign currency at fixed rates. Harder to quantify than an in ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
1998 Russian Financial Crisis
The Russian financial crisis (also called the ruble crisis or the Russian flu) began in Russia on 17 August 1998. It resulted in the Russian government and the Russian Central Bank devaluing the ruble and defaulting on its debt. The crisis had severe impacts on the economies of many neighboring countries. Background and course of events The Russian economy had set up a path for improvement after the Soviet Union had split into different countries. Russia was supposed to provide assistance to the former Soviet states and, as a result, imported heavily from them. In Russia, foreign loans financed domestic investments. When it was unable to pay back those foreign borrowings, the ruble devalued. In mid-1997 Russia had finally found a way out of inflation. The economic supervisors were happy about inflation coming to a standstill. Then the crisis hit and supervisors had to implement a new policy. Both Russia and the countries that exported to it experienced fiscal deficits. The c ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Russia
Russia (, , ), or the Russian Federation, is a transcontinental country spanning Eastern Europe and Northern Asia. It is the largest country in the world, with its internationally recognised territory covering , and encompassing one-eighth of Earth's inhabitable landmass. Russia extends across eleven time zones and shares land boundaries with fourteen countries, more than any other country but China. It is the world's ninth-most populous country and Europe's most populous country, with a population of 146 million people. The country's capital and largest city is Moscow, the largest city entirely within Europe. Saint Petersburg is Russia's cultural centre and second-largest city. Other major urban areas include Novosibirsk, Yekaterinburg, Nizhny Novgorod, and Kazan. The East Slavs emerged as a recognisable group in Europe between the 3rd and 8th centuries CE. Kievan Rus' arose as a state in the 9th century, and in 988, it adopted Orthodox Christianity from t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Money Creation
Money creation, or money issuance, is the process by which the money supply of a country, or of an economic or monetary region,Such as the Eurozone or ECCAS is increased. In most modern economies, money creation is controlled by the central banks. Money issued by central banks is termed base money. Central banks can increase the quantity of base money directly, by engaging in open market operations. However, the majority of the money supply is created by the commercial banking system in the form of bank deposits. Bank loans issued by commercial banks that practice fractional reserve banking expands the quantity of broad money to more than the original amount of base money issued by the central bank. Central banks monitor the amount of money in the economy by measuring monetary aggregates (termed broad money), consisting of cash and bank deposits. Money creation occurs when the quantity of monetary aggregates increase.For example, in the United States, money supply measured a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
