Demand For Bonds Formula In Fulton
Category:
State:
Multi-State
County:
Fulton
Control #:
US-00415BG
Format:
Word;
Rich Text
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Description
A Bond is a document with which one party promises to pay another within a specified amount of time. The term "demand" means that the principal plus any interest is due on demand by the bondholder rather than on a specific date. Bonds are used for many things, including borrowing money or guaranteeing payment of money. A bond can be given to secure performance of particular obligations, including the payment of money, or for purposes of indemnification. The validity of a "private" bond, payable upon demand, is determined by the same principles applicable to contracts generally. The purpose of the bond must not be contrary to public policy; it must be supported by a valuable consideration; and there must be a clear designation of the obligor and the obligee. A bond procured through fraud or duress may be unenforceable, but mistake on the part of the obligor as to the contents of a bond, or its legal effect, is not a defense to enforcement of the bond.
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Bond valuation is a process of determining the fair market price of the bond based on factors such as interest rates, bond payments, and time periods. Assume that the interest on these bonds is paid and compounded annually.The money supply has to decrease if you want interest rates to increase. The demand for money is a function of interest rates and income. It combines demand with supply of money. If the quantity demanded exceeds the quantity supplied, people sell assets like bonds to get money. The first step is to identify the amounts and the timing of the two types of future cash flows to be received on the bond. List and explain four major factors that determine the quantity demanded of an asset.
