0
What else can I help you with?
When are price and yield of government thirty-year bonds determined?
Price and yield are determined at auction.
What term is used to refer to the yield on a long term bond issued by the federal government?
The term used to refer to the yield on a long-term bond issued by the federal government is "Treasury yield." Specifically, it often pertains to the yield on 10-year or 30-year Treasury bonds, which are considered benchmarks for long-term interest rates in the economy. These yields reflect investor expectations about future interest rates and economic conditions.
If corporate bonds issued by Johnson Corporation currently yield 8 Municipal bonds of equal risk currently yield 6 At what tax rate would an investor be indifferent between these two bonds?
To find the federal tax rate at which the buyer would be indifferent between Muni bonds(which are tax free) and Corporate bonds(which fall under your tax bracket tax rate) you follow this simple formula: Corporate Bond Yield=(Municipal bond Yield)/(1- Federal tax rate) In this case you would solve for the Federal Tax Rate and get an answer of .25 or 25% http://luhman.org/Nts/Bond/140_Municipals.html
What are the bond types from lowest to highest yield?
Bonds are categorized based on their risk and return characteristics, with higher risk typically associated with higher yields. Here’s a ranking of bond types from lowest to highest yield: Treasury Bonds: Issued by the government, these are considered the safest investments since they are backed by the full faith and credit of the government. Examples include U.S. Treasury bonds and bills, offering the lowest yields due to their minimal default risk. Municipal Bonds: These are issued by state or local governments to fund public projects. They typically have slightly higher yields than Treasury bonds but remain relatively low due to their tax-exempt status for U.S. investors. Investment-Grade Corporate Bonds: Issued by financially stable companies, these bonds have a higher yield than government bonds. Their credit ratings are typically BBB or higher, reflecting low default risk. High-Yield Corporate Bonds (Junk Bonds): Issued by companies with lower credit ratings (BB or below), these bonds offer higher yields to compensate for increased risk. Emerging Market Bonds: Issued by governments or corporations in developing countries, these bonds provide the highest yields to attract investors, as they carry significant political, currency, and economic risks. Investors should assess their risk tolerance and financial goals when choosing bonds, as higher yields often come with increased risk.
What are the risks associated with investing in low yield bonds?
Investing in low yield bonds carries the risk of lower returns on investment compared to higher yield bonds. Additionally, there is a higher risk of inflation eroding the purchasing power of the returns earned from low yield bonds.
What is the difference between junk bonds and traditional bonds?
A junk bond is any bond with a BB or below rating. Also called high-yield bonds, they can become this way following one of two paths. In the days before Michael Milken, investment-grade bonds became junk because of various downturns in a company's fortune. Milken's great innovation, the one that made him so rich he could pay a billion dollars in fines to the federal government and still be rich, was creating bonds that started out life as high-yield paper.
What is the bond types from lowest to highest yield?
From lowest to highest yield, the typical bond types are: US Treasury bonds, US corporate bonds, municipal bonds, high-yield bonds, and emerging market bonds. The order is generally based on the credit risk associated with each type of bond, with US Treasury bonds considered the safest and typically offering the lowest yield.
What do I need to know about high yield investments?
Yes, high yield investments which are also called junk bonds, are quite risky and that is why they pay higher yields. Safer investments will have lower yields, and include AAA and AA rated corporate bonds, government bonds, as well as Certificates of Deposit (CDs) among others.
What happens when a yield to maturity is less than the yield to call?
The issuer will call the bonds and issue new bonds to the maturity date.
Where can one find high yield municipal bonds?
Someone that is looking for information on high yield municipal bonds, can do so by researching with websites such as About, Wikipedia, as well as Learn Bonds.
What is the average yield of high grade corporate bonds?
The average yield of high grade corporate bonds is typically around 3-5.
Does the yield to maturity represent the promised or expected return on the bonds?
The yield to maturity represents the promised yield on a bond
