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Class numer three - Coggle Diagram
Class numer three
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Yield on Selected Long Term Bonds, 1990- 2008
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Derivatives: Value depends on some underlying asset such as a stock or bond. Option is the contract that give you the right to buy or sell and asset at ser price in a specif time.
The SP was 26, if the real prices is less than 26, you don't use the option. But if it's is more than 26 then use it,
it's like insurance
Convertibles - Bonds or preferred stocks that can be exchanged for common stock at the option of holder. and Futures ( is like a compromised. )
Swaps - (exchange cash flows or assets)
Which financial instrument is the best? There are no answer, it depends on the issuer's or invertor's viewpoint.
International Markets: Eurodebt - Eurodonds, and auro credit, euro comercial paper.
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