Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Courses
  • Home
  • Economics, Finance, & Analytics
  • Investments, Trading, and Financial Markets

Bunny Bond - Definition

Written by Jason Gordon

Updated at December 19th, 2020

Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Accounting, Taxation, and Reporting
    Managerial & Financial Accounting & Reporting Business Taxation
  • Law, Transactions, & Risk Management
    Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
  • Marketing, Advertising, Sales & PR
    Principles of Marketing Sales Advertising Public Relations SEO, Social Media, Direct Marketing
  • Business Management & Operations
    Operations, Project, & Supply Chain Management Strategy, Entrepreneurship, & Innovation Business Ethics & Social Responsibility Global Business, International Law & Relations Business Communications & Negotiation Management, Leadership, & Organizational Behavior
  • Economics, Finance, & Analytics
    Economic Analysis & Monetary Policy Research, Quantitative Analysis, & Decision Science Investments, Trading, and Financial Markets Banking, Lending, and Credit Industry Business Finance, Personal Finance, and Valuation Principles
  • Professionalism & Career Development
  • Courses
+ More
Back to: INVESTMENTS TRADING & FINANCIAL MARKETS

Bunny Bond Definition

A bunny bond is a type of bond or an investment that offers investors the option to reinvest payments or dividends. The investors can reinvest the payment to secure additional bonds. Usually, bonds with the same coupon and maturity are reinvested in. However, this does not mean that investors who prefer to receive their dividends in cash cannot do so. This is why it gives an option, investors can choose to receive cash payment or recycle the dividends to buy additional bonds. A bunny bond is also referred to as a multiplier bond or a guaranteed coupon reinvestment bond.

A Little More on What is a Bunny Bond

A reliable avenue through which investors recycle coupon payments is a bunny bond. Investors can secure additional bonds. This offer is not compulsory, it is an option, investors can decide whether or not to reinvest their coupon payments. Investors who seeks protection from reinvestment risk or lower interest rates do find bunny bonds as appealing arrangements. Reinvestment risk has impacts on the interest rates of bonds, interest rates decline often amount to loss for investors. A bond's yield to maturity (YTM) can also be affected by reinvestment risk. The calculation of YTM for any bond is based on the belief that future coupon payments will be reinvested at higher rates that when it was initially purchased. However, reinvestment risk is one that holds that future coupons will be reinvested at a lower interest rate than when the bond was originally purchased.

References for Bunny Bond

  • http://www.businessdictionary.com/definition/bunny-bond.html
  • https://www.investopedia.com/terms/b/bunnybond.asp
  • https://financial-dictionary.thefreedictionary.com/Bunny+Bonds
  • https://thelawdictionary.org/bunny-bond/

Academic Research on Bunny Bond

The weighted average cost of capital is not quite right: Reply to M. Pierru, Miller, R. A. (2009). The Quarterly Review of Economics and Finance, 49(3), 1213-1218. Comment on Do Informational Frictions Justify Federal Credit Programs?, Davidson, P. (1994). Journal of Money, Credit and Banking, 26(3), 545-551.Development of leadership within the university and beyond: Challenges to faculty and their development, Triolo, P. K., Pozehl, B. J., & Mahaffey, T. L. (1997). Journal of Professional Nursing, 13(3), 149-153. Marketable Debt Securities in the International Financial Markets, Buljevich, E. C., & Park, Y. S. (1999). Project Financing and the International Financial Markets, 35-54.  What money can't buy: the moral limits of markets, Sandel, M. J. (2000). Tanner Lectures on Human Values, 21, 87-122.Can Energy Markets Be Trusted-The Effect of the Rise and Fall of Enron on Energy Markets, Weaver, J. L. (2004). Hous. Bus. & Tax LJ, 4, 1. The Financial Reporter, Cramer, E., Horbatt, W. R., Freedman, M. J., Enoch, J. F., Solow, D. D., Hay, L. J., ... & Morrison, J. D. (2004). The Financial Reporter.Explaining the demand for life annuities in the australian market, Ganegoda, A., & Bateman, H. (2007). Centre for Pensions and Superannuation. Investment consultants and institutional corruption, Youngdahl, J. (2013). 

Was this article helpful?

Yes
No

Related Articles

  • Warrant (Finance) - Definition
  • Face Value (Securities) - Definition
  • Annualized Rate - Definition
  • Institutional Investor - Definition

©2011-2021. The Business Professor, LLC.
  • Privacy

  • Questions

Definition by Author

0
0
Expand