To discuss: The impact of lack of transparency in the bond market on the bond investors
Introduction:
Bond:
A bond refers to the debt securities issued by the governments or corporations for raising capital. The borrower does not return the face value until maturity. However, the investor receives the coupons every year until the date of maturity.
Transparency in the bond market:
The bond market transactions happen over the counter (OTC). It is not possible to monitor the prices in the bond market easily. Moreover, it is difficult to know the exact trading volume in the bond market. It is difficult to obtain up to date prices of the bonds. Hence, the bond market lacks transparency.
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