This is “Interest Rates and Bond Valuation”, chapter 9 from the book Finance for Managers (v. 0.1).
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Loaning small amounts of money to your friends might take no more than a word or a handshake, but when dealing with large amounts of money with complete strangers, we tend to require a bit more formality. Banks are the first place we tend to consider when we think about these more formal loans, but there are other avenues for governments, municipalities, corporations, and other borrowers to raise funds, as we disucssed in Chapter 8 "Securities Markets".