Demand For Bonds Formula In Harris
Category:
State:
Multi-State
County:
Harris
Control #:
US-00415BG
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Word;
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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. The money supply has to decrease if you want interest rates to increase.The demand for money is the relationship between the quantity of money people want to hold and the factors that determine that quantity. Open market purchases raise bond prices, and open market sales lower bond prices. So, open market operations (OMOs) affect bond prices. A basic method involves taking half the annual coupon rate, yielding an approximate semiannual bond yield. Economic order quantity (EOQ) is the ideal quantity of units a company should purchase to meet demand while minimizing inventory costs.
