Then, if the market interest rate drops in the future and the issuer can issue new bonds at a lower interest rate, the cost of the original bonds will be relatively high, while the investors will get higher rewards compared with the current market interest rate, and the price of the original bonds will rise; On the other hand, if the market interest rate rises in the future and the cost of newly issued bonds increases, the cost of the original bonds will be relatively low, while the return of investors will be lower than the income from buying new bonds, and the price of the original bonds will fall.
Short-term bonds are bonds issued to raise short-term funds. Generally, the term is within one year. Some medium-and long-term bonds circulating in the market with a maturity of less than one year are also regarded as short-term bonds. Short-term bonds have the advantages of strong liquidity and low risk, so they are often welcomed by ordinary investors. However, its output is also very low. There are financial institutions, companies and individuals who buy short-term bonds. Financial institutions, in particular, buy more short-term government bonds and short-term corporate bonds and regard them as secondary reserves of their own assets.
Long-term bonds: Generally speaking, long-term bonds with a repayment period of more than 10 years are mainly issued by the government, financial institutions and enterprises, while those with a repayment period of more than 5 years in China are long-term corporate bonds.
Depending on the repayment period. Generally speaking, long-term bonds with a repayment period of more than 10 years; Short-term bonds with repayment period less than 1 year; Medium-term bonds with a maturity of more than 1 year and less than1year (inclusive). The term division of China's national debt is the same as the above standards. However, the term division of corporate bonds in China is different from the above standards. The repayment period of short-term corporate bonds in China is less than 1 year, the repayment period of medium-term corporate bonds is more than 1 year and less than 5 years, and the repayment period of long-term corporate bonds is more than 5 years.
Short-term bonds: bonds with a repayment period of less than 1 year are short-term bonds.
The issuers of short-term bonds are mainly industrial and commercial enterprises and the government. Banks in financial institutions rarely issue short-term bonds because deposits are the main source of funds, and a large part of deposits have a term of less than 1 year.
The government issues short-term bonds mainly to balance the budget expenditure. Short-term bonds issued by the US government are divided into three months, six months, nine months and 12 months. There are few short-term bonds issued by our government.
Usually, the annual number of days is 360, and the semi-annual number is 180. Cumulative interest-bearing days are divided into two types: calculated by actual days (ACT/360, ACT/ 180) and calculated by 30 days per month (30/360, 30/ 180).