<p>If the bank sells me the bond they bought from a municipality, I am now simply entitled to the bond's remaining cash flows from the municipality. The price I pay for the bond from the bank is equivalent to the discounted present value of all remaining cash flows.</p>

CC BY-SA 3.0
2017-01-31T15:01:36.977Z
2017-01-31T16:19:58.550Z
2017-01-31T16:19:58.550Z
hipHopMetropolisHastings
<p>Suppose the government of a country issues a bond. A certain bank buys that bond: </p>

<ul>
<li><p>The bank loaned a certain sum of money to the government.</p></li>
<li><p>The government has to pay interest every x intervals of time and the face price at the maturity date to the bank.</p></li>
</ul>

<p>What if the bank sells that same bond that it bought to the public. What happens then? If I buy the bond:</p>

<ul>
<li>I give a sum of money to the bank </li>
<li>The bank now has to pay me interest and the face price at the maturity date? </li>
</ul>

<p>What happens to the government in the equation?</p>

<financial-economics><bonds>
Buying/selling bonds more than once
Omrane
# Buying/selling bonds more than once

(Asked by: username_0 on 2017-01-31)

Suppose the government of a country issues a bond. A certain bank buys that bond:

* The bank loaned a certain sum of money to the government.
* The government has to pay interest every x intervals of time and the face price at the maturity date to the bank.

What if the bank sells that same bond that it bought to the public. What happens then? If I buy the bond:

* I give a sum of money to the bank
* The bank now has to pay me interest and the face price at the maturity date?

What happens to the government in the equation?

**Tags:** financial-economics, bonds


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## 1 answers

### Answer by username_1 on 2017-01-31. Score: 1

If the bank sells me the bond they bought from a municipality, I am now simply entitled to the bond's remaining cash flows from the municipality. The price I pay for the bond from the bank is equivalent to the discounted present value of all remaining cash flows.


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