GLOSSARY ENTRY (DERIVED FROM QUESTION BELOW) | ||||||
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07:08 Apr 11, 2006 |
English language (monolingual) [PRO] Bus/Financial - Finance (general) | |||||||
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| Selected response from: Dave Calderhead Netherlands Local time: 06:59 | ||||||
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SUMMARY OF ALL EXPLANATIONS PROVIDED | ||||
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4 | avoiding borrowing |
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3 | Default of obligations |
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Default of obligations Explanation: Bond Bonds are debt and are issued for a period of more than one year. The US government, local governments, water districts, companies and many other types of institutions sell bonds. When an investor buys bonds, he or she is lending money. The seller of the bond agrees to repay the principal amount of the loan at a specified time. Interest-bearing bonds pay interest periodically. Rate risk In banking, the risk that profits may drop or losses occur because a rise in interest rates forces up the cost of funding fixed-rate loans or other fixed-rate assets. Credit risk The risk that an issuer of debt securities or a borrower may default on its obligations, or that the payment may not be made on a negotiable instrument. Related: Default risk. Default risk The risk that an issuer of a bond may be unable to make timely principal and interest payments. Also referred to as credit risk (as gauged by commercial rating companies). (In the event that the issuer of the bond will be unable to make interest premium payments to the buyer of the bond.) I believe this makes more sense. taken from http://www.openoffshorebankaccountsfornonresidents.com/ZDFin... |
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avoiding borrowing Explanation: or avoidance of borrowing see ref: Deficits, the National Debt, and Economic GrowthBorrowing for good investments is NOTHING TO FEAR - political rhetoric ... They talk as if "success" means "avoidance of borrowing and debt," but never ... web2.airmail.net/scsr/ -------------------------------------------------- Note added at 1 day20 mins (2006-04-12 07:29:01 GMT) Post-grading -------------------------------------------------- avoiding borrowing means that credit risk becomes a significant risk to the solvency of the business, to clarify the relevance of Dreamers' answer. |
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