Do you want BuboFlash to help you learning these things? Click here to log in or create user.

Tags

#asset-swap #finance

Question

Asset swap (type: [...]) is a difference between bond quoted price and implied strip price of the same bond (implied price of cashflows against a specific yield curve), quoted as the spread on the floating swap side that matches the maturity of the bond.

Answer

par-par (type "market" has similar structure, but par-par has non-zero PV, while market has 0 PV)

status | not learned | measured difficulty | 37% [default] | last interval [days] | |||
---|---|---|---|---|---|---|---|

repetition number in this series | 0 | memorised on | scheduled repetition | ||||

scheduled repetition interval | last repetition or drill |

Asset swap (type: market - same structure as par-par but at different price) is a difference between bond quoted price and implied strip price of the same bond (implied price of cashflows against a specific yield curve), quoted as the spread on the floating swap

#bonds #finance #has-images

The coupon yield is simply the coupon payment as a percentage of the face value .

status | not read | reprioritisations | ||
---|---|---|---|---|

last reprioritisation on | reading queue position [%] | |||

started reading on | finished reading on |

ices are often quoted in terms of YTM. To achieve a return equal to YTM, i.e. where it is the required return on the bond, the bond owner must: buy the bond at price ,hold the bond until maturity, andredeem the bond at par. Coupon yield[edit] <span>The coupon yield is simply the coupon payment as a percentage of the face value . Coupon yield is also called nominal yield. Current yield[edit] The current yield is simply the coupon payment as a percentage of the (current) bond price . Relationship[edit] The concept of current yield is closely related to o

#bonds #finance

market price of a 17-year bond with a duration of 7 would fall about 7% if the market interest rate increased by 1% per annum.

status | not read | reprioritisations | ||
---|---|---|---|---|

last reprioritisation on | reading queue position [%] | |||

started reading on | finished reading on |

of the bond's price with respect to discount rates. For example, for small interest rate changes, the duration is the approximate percentage by which the value of the bond will fall for a 1% per annum increase in market interest rate. So the <span>market price of a 17-year bond with a duration of 7 would fall about 7% if the market interest rate (or more precisely the corresponding force of interest) increased by 1% per annum. Convexity is a measure of the "curvature" of price changes. It is needed because the price is not a linear function of the discount rate, but rather a convex function of the di

#bonds #finance #yield-to-maturity

All the coupons are reinvested at an interest rate equal to the yield-to-maturity - it is a common mistaken assumption, but not true. Each part of today's price earns interest before being paid out either as a coupon or as a principal.

status | not read | reprioritisations | ||
---|---|---|---|---|

last reprioritisation on | reading queue position [%] | |||

started reading on | finished reading on |

ds6 See also7 References8 External links Main assumptions[edit] The main underlying assumptions used concerning the traditional yield measures are: The bond will be held to maturity.All coupon and principal payments will be made on schedule.<span>All the coupons are reinvested at an interest rate equal to the yield-to-maturity.[3]The yield is usually quoted without making any allowance for tax paid by the investor on the return, and is then known as "gross redemption yield". It also does not make an

Tags

#bonds #finance

Question

market price of a 17-year bond with a duration of 7 would [...]if the market interest rate increased by 1% per annum.

Answer

fall about 7%

status | not learned | measured difficulty | 37% [default] | last interval [days] | |||
---|---|---|---|---|---|---|---|

repetition number in this series | 0 | memorised on | scheduled repetition | ||||

scheduled repetition interval | last repetition or drill |

market price of a 17-year bond with a duration of 7 would fall about 7% if the market interest rate increased by 1% per annum.

of the bond's price with respect to discount rates. For example, for small interest rate changes, the duration is the approximate percentage by which the value of the bond will fall for a 1% per annum increase in market interest rate. So the <span>market price of a 17-year bond with a duration of 7 would fall about 7% if the market interest rate (or more precisely the corresponding force of interest) increased by 1% per annum. Convexity is a measure of the "curvature" of price changes. It is needed because the price is not a linear function of the discount rate, but rather a convex function of the di

Tags

#bonds #finance

Question

market price of a 17-year bond with a duration of 7 would fall about 7% if [...].

Answer

the market interest rate increased by 1 percentage point per annum

status | not learned | measured difficulty | 37% [default] | last interval [days] | |||
---|---|---|---|---|---|---|---|

repetition number in this series | 0 | memorised on | scheduled repetition | ||||

scheduled repetition interval | last repetition or drill |

market price of a 17-year bond with a duration of 7 would fall about 7% if the market interest rate increased by 1% per annum.

of the bond's price with respect to discount rates. For example, for small interest rate changes, the duration is the approximate percentage by which the value of the bond will fall for a 1% per annum increase in market interest rate. So the <span>market price of a 17-year bond with a duration of 7 would fall about 7% if the market interest rate (or more precisely the corresponding force of interest) increased by 1% per annum. Convexity is a measure of the "curvature" of price changes. It is needed because the price is not a linear function of the discount rate, but rather a convex function of the di

#bonds #finance #yield-to-maturity

If a bond's coupon rate is less than its YTM, then the bond is selling at a discount.

status | not read | reprioritisations | ||
---|---|---|---|---|

last reprioritisation on | reading queue position [%] | |||

started reading on | finished reading on |

If a bond's coupon rate is less than its YTM, then the bond is selling at a discount.If a bond's coupon rate is more than its YTM, then the bond is selling at a premium.If a bond's coupon rate is equal to its YTM, then the bond is selling at par. </bod

usually quoted without making any allowance for tax paid by the investor on the return, and is then known as "gross redemption yield". It also does not make any allowance for the dealing costs incurred by the purchaser (or seller). <span>Coupon rate vs. YTM[edit] If a bond's coupon rate is less than its YTM, then the bond is selling at a discount.If a bond's coupon rate is more than its YTM, then the bond is selling at a premium.If a bond's coupon rate is equal to its YTM, then the bond is selling at par. Variants of yield to maturity[edit] As some bonds have different characteristics, there are some variants of YTM: Yield to call: when a bond is callable (can be repurchased by the issuer

#bonds #finance #yield-to-maturity

If a bond's coupon rate is more than its YTM, then the bond is selling at a premium.

status | not read | reprioritisations | ||
---|---|---|---|---|

last reprioritisation on | reading queue position [%] | |||

started reading on | finished reading on |

If a bond's coupon rate is less than its YTM, then the bond is selling at a discount.If a bond's coupon rate is more than its YTM, then the bond is selling at a premium.If a bond's coupon rate is equal to its YTM, then the bond is selling at par.

usually quoted without making any allowance for tax paid by the investor on the return, and is then known as "gross redemption yield". It also does not make any allowance for the dealing costs incurred by the purchaser (or seller). <span>Coupon rate vs. YTM[edit] If a bond's coupon rate is less than its YTM, then the bond is selling at a discount.If a bond's coupon rate is more than its YTM, then the bond is selling at a premium.If a bond's coupon rate is equal to its YTM, then the bond is selling at par. Variants of yield to maturity[edit] As some bonds have different characteristics, there are some variants of YTM: Yield to call: when a bond is callable (can be repurchased by the issuer

#bonds #finance #yield-to-maturity

If a bond's coupon rate is equal to its YTM, then the bond is selling at par.

status | not read | reprioritisations | ||
---|---|---|---|---|

last reprioritisation on | reading queue position [%] | |||

started reading on | finished reading on |

If a bond's coupon rate is less than its YTM, then the bond is selling at a discount.If a bond's coupon rate is more than its YTM, then the bond is selling at a premium.If a bond's coupon rate is equal to its YTM, then the bond is selling at par.

usually quoted without making any allowance for tax paid by the investor on the return, and is then known as "gross redemption yield". It also does not make any allowance for the dealing costs incurred by the purchaser (or seller). <span>Coupon rate vs. YTM[edit] If a bond's coupon rate is less than its YTM, then the bond is selling at a discount.If a bond's coupon rate is more than its YTM, then the bond is selling at a premium.If a bond's coupon rate is equal to its YTM, then the bond is selling at par. Variants of yield to maturity[edit] As some bonds have different characteristics, there are some variants of YTM: Yield to call: when a bond is callable (can be repurchased by the issuer

Tags

#bonds #finance #has-images

Question

The current yield is simply the coupon payment as a percentage of the [...]

Answer

bond price, i.e.

\(\Large currentYield=\frac{coupon}{bondPrice}\)

\(\Large currentYield=\frac{coupon}{bondPrice}\)

status | not learned | measured difficulty | 37% [default] | last interval [days] | |||
---|---|---|---|---|---|---|---|

repetition number in this series | 0 | memorised on | scheduled repetition | ||||

scheduled repetition interval | last repetition or drill |

The current yield is simply the coupon payment as a percentage of the (current) bond price .

the bond at price ,hold the bond until maturity, andredeem the bond at par. Coupon yield[edit] The coupon yield is simply the coupon payment as a percentage of the face value . Coupon yield is also called nominal yield. Current yield[edit] <span>The current yield is simply the coupon payment as a percentage of the (current) bond price . Relationship[edit] The concept of current yield is closely related to other bond concepts, including yield to maturity, and coupon yield. The relationship between yield to maturity and t

#bonds #finance

Coupon yield is also called nominal yield.

status | not read | reprioritisations | ||
---|---|---|---|---|

last reprioritisation on | reading queue position [%] | |||

started reading on | finished reading on |

The coupon yield is simply the coupon payment as a percentage of the face value . Coupon yield is also called nominal yield.

ices are often quoted in terms of YTM. To achieve a return equal to YTM, i.e. where it is the required return on the bond, the bond owner must: buy the bond at price ,hold the bond until maturity, andredeem the bond at par. Coupon yield[edit] <span>The coupon yield is simply the coupon payment as a percentage of the face value . Coupon yield is also called nominal yield. Current yield[edit] The current yield is simply the coupon payment as a percentage of the (current) bond price . Relationship[edit] The concept of current yield is closely related to o

status | not learned | measured difficulty | 37% [default] | last interval [days] | |||
---|---|---|---|---|---|---|---|

repetition number in this series | 0 | memorised on | scheduled repetition | ||||

scheduled repetition interval | last repetition or drill |

Coupon yield is also called nominal yield.

ices are often quoted in terms of YTM. To achieve a return equal to YTM, i.e. where it is the required return on the bond, the bond owner must: buy the bond at price ,hold the bond until maturity, andredeem the bond at par. Coupon yield[edit] <span>The coupon yield is simply the coupon payment as a percentage of the face value . Coupon yield is also called nominal yield. Current yield[edit] The current yield is simply the coupon payment as a percentage of the (current) bond price . Relationship[edit] The concept of current yield is closely related to o

status | not learned | measured difficulty | 37% [default] | last interval [days] | |||
---|---|---|---|---|---|---|---|

repetition number in this series | 0 | memorised on | scheduled repetition | ||||

scheduled repetition interval | last repetition or drill |

Coupon yield is also called nominal yield.

ices are often quoted in terms of YTM. To achieve a return equal to YTM, i.e. where it is the required return on the bond, the bond owner must: buy the bond at price ,hold the bond until maturity, andredeem the bond at par. Coupon yield[edit] <span>The coupon yield is simply the coupon payment as a percentage of the face value . Coupon yield is also called nominal yield. Current yield[edit] The current yield is simply the coupon payment as a percentage of the (current) bond price . Relationship[edit] The concept of current yield is closely related to o

Tags

#bonds #finance #has-images

Question

Answer

face (par) value .

status | not learned | measured difficulty | 37% [default] | last interval [days] | |||
---|---|---|---|---|---|---|---|

repetition number in this series | 0 | memorised on | scheduled repetition | ||||

scheduled repetition interval | last repetition or drill |

The coupon yield is simply the coupon payment as a percentage of the face value .

ices are often quoted in terms of YTM. To achieve a return equal to YTM, i.e. where it is the required return on the bond, the bond owner must: buy the bond at price ,hold the bond until maturity, andredeem the bond at par. Coupon yield[edit] <span>The coupon yield is simply the coupon payment as a percentage of the face value . Coupon yield is also called nominal yield. Current yield[edit] The current yield is simply the coupon payment as a percentage of the (current) bond price . Relationship[edit] The concept of current yield is closely related to o