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You have been asked to write a training document about the US Bond Market for use in the new employee training program. In your document, you must make sure to address each of the following:
1. the key players in the market; and the types of investments available to both individual investors and institutional investors,
2. the way transactions are carried out, and
3. the relation, if any, between the bond markets and the stock markets.

The key players in the bond market can be broken down into three groups: issuers, underwriters, and purchasers. An issuer is defined as “a legal entity that develops, registers and sells securities for the purpose of financing its operations.” (Investopedia.com, 2007) An underwriter is defined as “a company or other entity that administers the public issuance and distribution of securities from a corporation or other issuing body. (Investopedia.com, 2007) Underwriters work closely with issuing bodies to determine a securities offering price, then purchases the security, then sells it to investors through their distribution network. Purchasers are the individuals and institutions that purchase securities from underwriters. Purchasers can purchase bonds on either the primary or secondary markets. The primary market is made up of newly issued bonds, while the secondary market is made up of previously issued bonds. (Gitman & Joehnk, 2007)
There are many different types of investments available to both individual and institutional investors. They include Treasury bonds, Treasury bills (T-bills), Treasury notes, Zero-coupon bonds, Mortgage-backed bonds, Corporate bonds, and Municipal bonds. U.S. Treasurys (including Treasury bonds, T-bills, and Treasury notes) are the safest bonds investors can purchase because the principal and interest payments are guaranteed by the “full faith and credit” of the U.S. government. Since they are a very low investment risk, Treasurys carry the lowest...