I have very straigtforward question (in my perception):

Is there any study/research/evidence that provides insights on the following question(s): Why is plain-vanilla most common bond in the market? Why it has highly level lequidity, why issuers and investors more prefer to trade with plain-vanilla, than with other varieties of bonds?


closed as off-topic by skoestlmeier, LocalVolatility, Attack68, amdopt, AdB Apr 11 at 9:18

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  • 7
    $\begingroup$ why is money typically denominated in 5s 10s 20s 50s 100s, as opposed to 11s 23s 66s and 189s? $\endgroup$ – Attack68 Apr 1 at 18:39
  • $\begingroup$ @Attack68 I don't think that your comment has any relationship with my question. $\endgroup$ – sane Apr 1 at 18:46

I'll hazard an answer: because people/investors like to receive interim payments when lending money, hence coupon bonds are more common than zero coupons, and for issuers it means less credit risk premium to pay. People/investors also like dividend paying stocks. Gives them a (false) sense of security. But investor psychology is not my expertise, so my guess is as good as yours.

This is not a quantitative finance question though, nor is mine a quantitative finance answer.


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