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Silencio Tarsier Posted 14 years ago
Vocabulary

Institutional preference

what is "institutional" preference?

Investors have no institutional preference for particular maturities. They regard various maturities as perfect substitutes for each other.
  

Top answer

Institutions such as municipalities, states, counties and even nations issue bonds to raise capital for various purposes. These bonds can be purchased in different bond markets throughout the world. Investors have no preference for the entity that issues the bond.

  • Institutions such as municipalities, states, counties and even nations issue bonds to raise capital for various purposes.
  • These bonds can be purchased in different bond markets throughout the world.
  • Investors have no preference for the entity that issues the bond.
  • All they care about is how much it will pay them when the bond reaches maturity.
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1 Answers
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Institutions such as municipalities, states, counties and even nations issue bonds to raise capital for various purposes. These bonds can be purchased in different bond markets throughout the world. Investors have no preference for the entity that issues the bond. All they care about is how much it will pay them when the bond reaches maturity.

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