Abstract
A bond is commonly understood to be a debt instrument in which a borrower receives an advance of funds and contracts to make future payments of interest and principal according to an explicit schedule. The nominal return from holding a bond is the sum of its interest payments and the change in its price over an arbitrary holding period. Bonds differ in terms of face value, maturity, callability, seniority, convertibility, risk of default, and size, frequency and taxability of interest payments. Since 1970 bond markets have experienced a number of major institutional changes with enduring consequences for capital markets.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Bibliography
Becketti, S. 1988. The role of stripped securities in portfolio management. Federal Reserve Bank of Kansas City Economic Review 73: 20–31.
Black, F., and M. Scholes. 1973. The pricing of options and corporate liabilities. Journal of Political Economy 81: 637–654.
Bulow, J., and K. Rogoff. 1988. The buyback boondoggle. Brookings Papers on Economic Activity 2: 675–704.
Bulow, J., and J. Shoven. 1978. The bankruptcy decision. Bell Journal of Economics 9: 437–456.
Cox, J., J. Ingersoll Jr., and S. Ross. 1981. The relation between forward prices and futures prices. Journal of Financial Economics 9: 321–346.
Crabbe, L. 1993. Anatomy of the medium-term note market. Federal Reserve Bulletin 79: 751–768.
Modigliani, F., and M. Miller. 1963. Corporate income taxes and the cost of capital: A correction. American Economic Review 53: 433–443.
Robinson, J. 1951. The rate of interest. Econometrica 19: 92–111.
Smith, W. 1970. The role of government-sponsored intermediaries. In Housing and monetary policy, Conference series no. 4, 86–101. Boston: Federal Reserve Bank of Boston.
Stoll, H. 1969. The relationship between put and call option prices. Journal of Finance 24: 801–824.
Tobin, J. 1963. An essay on the principles of debt management. In Fiscal and debt management policies, Prepared for the Commission on Money and Credit, 143–218. Englewood Cliffs: Prentice-Hall.
Wrase, J. 1997. Inflation-indexed bonds: How do they work? Federal Reserve Bank of Philadelphia Business Review 3–16.
Zhang, P. 1997. Exotic options: A guide to second generation options. Singapore: World Scientific Publishing.
Author information
Authors and Affiliations
Editor information
Copyright information
© 2018 Macmillan Publishers Ltd.
About this entry
Cite this entry
Hester, D.D. (2018). Bonds. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_606
Download citation
DOI: https://doi.org/10.1057/978-1-349-95189-5_606
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-95188-8
Online ISBN: 978-1-349-95189-5
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences