Page-2 of GKToday Archives: April, 2011

Coupon Amount and Coupon Yield

Please note that Coupon amount is the sum of money the bond holder receives as an interest payment at fixed intervals. Coupon Yield is the return that investor receives on his investment. Coupon Amount = Face Value X Coupon rate ..

Types of Government Bonds

The Government Securities are of the following types. Dated Securities Zero Coupon Bonds Floating rate Bonds Call / Put Option Bonds Dated Securities: Dated Securities have fixed maturity and are identified with the date of maturity. They have either fixed ..

Fixed Income Markets

The maturity of the Fixed income markets is longer than 1 year. There are two kinds of instruments in the Fixed Income Markets viz. Bonds and Debentures. Bonds: Bond is an interest asset which can be issued by the Government, ..

Inter Corporate Deposits (ICD)

ICD market is used for short term cash management of the large corporates. As per the RBI Guidelines, the Minimum period of ICDs is 7 days which can be extended to One year. The ICDs are of two types: Fixed ..

Liquidity Adjustment Facility (LAF)

Liquidity Adjustment Facility (LAF) is the primary instrument of Reserve Bank of India for modulating liquidity and transmitting interest rate signals to the market. It refers to the difference between the two key rates viz. repo rate and reverse repo rate. ..

Repo / Reverse Repo

Repo is a short term borrowing for dealers in the Government securities. In India, Repo and Reverse Repo transactions are done only in Mumbai and only between the parties approved by Reserve Bank of India. RBI sells and purchases the ..