Bond

Relationship Between Bond Price and Interest Rate

For instance, if a zero-coupon bond is trading at $950 and has a par value of $1,000 (paid at maturity in one year), the bond’s rate of return at the present time is approximately 5.26% ((1000-950) / 950 = 5.26%). For a person to pay $950 for this bond, he or she must be happy […]

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Analysis of Convertible Bonds

With the repeal of the Capital Issues Control Act and the enactment of SEBI Act in 1992, the rules of the game applicable to convertible bonds have changed. As per SEBI guidelines issued in June 1992, the provisions applicable to fully convertible bonds and partially convertible binds are as follows: * The conversion premium and […]

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