Moreover, bond prices were strongly influenced by the presence of information asymmetries in the market. Most bondholders were poorly informed of the possibil- ities that bonds represent, how they can be traded, and what kinds of risk they carry. At the beginning of trading, a great majority of bondholders believed bonds to be liable to default risk, which, from their perspective, significantly reduced bond price. Serbia’s old saving bonds are discount types of bonds. They bear a 2% annual interest rate (rolled in interest rate) that is paid at the time of maturity. Each bond matures on the 31st of May in the year of its maturity
