Financial markets and institutions

In the occasion that these bonds are being issued, it is always a promise being made between the corporation and the bondholder and there must be an acceptance through the placement of a sign that indeed the bond will be paid back after an agreed period with an interest. The amount of interest paid by the bondholder can be fixed, annual or monthly according to the agreement made between the two parties and also in consideration of the amount of bond taken. Bonds also happen to have maturities which depend also on the agreement between the two parties and even on the amount of bond leased out and these maturities always range from five years to even fifty years (Burton, et al.

A bond can be in many forms such as the municipal bond, governmental bond or even in the form of a corporate bond. Bonds are considered one of the greatest transactions and are very important to the US global economy as they contribute to about 2/3 of the general Trade that takes place in the United States. The Federal Reserves were therefore created with the aim of “Federal government demand for loanable funds could be influenced by the future state of the economy because it affects tax revenues to be received and the amount of unemployment compensation to be paid out, factors that affect the size of government deficit” (Madura 119). From the above case, we find out that indeed the Federal Reserve’s roles which are to ensure whether the loans influenced by the future position of the general economy mainly because of its effect on the tax revenues.

The current or the most recent monetary policy, in this case, is the most recent press release that was extracted from one and only Federal Open Market Committee that was held on the 12th December 2012 and their main aim is to do their level best and help the economy recover to its normal position, it is also channeled towards stabilizing the prices of the various goods and services and thereafter striving to create as many employment opportunities as possible. In order for the Fed to make stabilization on the prices of the various commodities that are dealt with by the different corporations and even the government and also maintain the employment rate, there are set plans to come up with fundraising that will range from 0 to.