ACC-202 Lecture Notes - Lecture 37: Takeover, United States Treasury Security
15 Apr 2016
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Bond = a not issue a lot of time by the government. Has to issue bonds because this is where the deficit comes form. Gets the extra ,000 bonds (deficit) The government doesn"t want to print money because it leads to inflation. There is sufficient money in the banks; however, the interest rates go up and down. When you borrow that much, even if interest rates go up % it has a large impact. Bonds can last for a really long time. Every treasury bond issued last 20 years. You are getting an interest payment every year, but it is a fixed rate. If you have extreme amounts of money you like bonds because: Fixed interest rates (the larger the amount the fluctuation of interest % has a larger impact) Foreign countries that have lots of surpluses: e. g. They can raise vast sums of money through bonds. You guarantee a fixed rate: mutually beneficial.
