I have been adding new entries to the glossary to celebrate a quieter day:
EU Code of Conduct on Business Taxation
Base Erosion and Profits Shifting
Economically active population
The following entry has also been updated:
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Corporate bonds are not usually issued in a ‘stock exchange’.
I beg to differ
I am afraid she is right. Corporate bonds are often listed on a Stock Exchange but almost never trade there. I would prefer
“Corporate bonds are a type of debt security issued by a firm and sold to investors, usually via a group of underwriting dealers.”
You might use “banks” instead of “underwriting dealers” …. but technically, not all bond dealers are banks
If they are listed they can be traded.
I am well aware that the trades are rare. My research has shown some do not trade for years.
But they are listed, and that is one of their characteristics and precisely why I will be leaving the entry as it is.
To not refer to listing would be quite misleading.
Your glossary – your rules/opinions….
… but “sold to investors, usually via a stock exchange.” is factually incorrect – it is highly unusual for an investor to buy via a stock exchange.
How about…
“Corporate bonds are a type of debt security issued by a firm and sold to investors, usually via a group of underwriting dealers. They are often listed on a Stock Exchange but almost invariably trade directly between dealers and clients”
But that is wrong.
First of all, the listing is fundamental to their tax status.
Second, what you describe is just as appropriate for share listings in a great many cases: these too are sold to investors via underwriters.
And the absence of trades is also true for many shares.
So I am sticking with what I said, which I continue to think to be correct. We will have to disagree.
You are describing a process, not a corporate bond, in my opinion.
Actually thanks enormously for compiling your glossary Richard, I have been attempting to understand economics since high school many many moons ago and your glossary makes reading economics articles and books so so much easier and accessible. I appreciate it thanks.
Thanks
The aim is to help people understand the economy and if it is helping its working