0
Yield Curves ( for an example see: http://www.bloomberg.com/markets/rates/index.html ).
The Yield Curve is a graphic plot of Yields to Maturity for Benchmark Government Securities (vertical axis) versus the Time to Maturity (expressed in Years, Horizontal Axis).
The Shape of the Yield Curve shows investors what the market consensus is on Interest Rate expectations for the future. For example a steeply upward sloping Yield Curve as we have at the time of writing implies that investors expect interest rates to rise very considerably over the coming months and years.
The Yield Curve can also be used simply to illustrate where in the maturity spectrum the highest or lowest yields are available.
Corporate and other Non-Government securities (see www.davidandgoliathworld.com) are typically priced at a yield spread (extra yield) over the Government Yield Curve - which therefore in turn implies that the Government Yield Curve is necessary information for anyone looking to issue or invest in Corporate Bonds
Wiki User
∙ 14y ago
Add your answer:
Earn +20 pts
Will a bond's yield to maturity increase or decrease if a bond 's price increases?
as yield to maturity increases the bonds price decreases, because a higher yield to maturity means its riskier to investors
What shapes have curves?
What shape has curves
How does the yield to maturity on a bond differ from the coupon yield or current yield?
The rate of return anticipated on a bond if held until the end of its lifetime. YTM is considered a long-term bond yield expressed as an annual rate. The YTM calculation takes into account the bond's current market price, par value, coupon interest rate and time to maturity. It is also assumed that all coupon payments are reinvested at the same rate as the bond's current yield. YTM is a complex but accurate calculation of a bond's return that helps investors compare bonds with different maturities and coupons.
What is likely to happen to yield to maturity on bonds in the marketplace if inflationary expectations increase?
The prices of bonds will fall and yields to maturity (or call date) will rise, since investors will require greater yields on their investments to offset the expected increase in inflation.
Do market and supply curves have negative slopes?
Do market supply curves have negative slopes
Are High Yield investments worth it?
I do not believe High Yield Investments are worth it. It's a scam that promises large returns on investments by paying previous investors with the money invested by new investors.
What is the Importance of investors in a firm?
Investors provides the funds (business capital) which the company uses to operate. With no investors there is no business.
What is the importance of curves in engineering drawing?
it is worthless in engineering drawing.
What traffic sign describes your love life?
stop, green light, yield/ slow down, dead end, do not enter, curves ahead, caution
Will a bond's yield to maturity increase or decrease if a bond 's price increases?
as yield to maturity increases the bonds price decreases, because a higher yield to maturity means its riskier to investors
How can you benefit from a high yield investment?
A high-yield investment program is an investment scam that promises unsustainable high return on investment by paying previous investors with the money invested by new investors. The only benefit is that you may get your money back. They are to risky.
Colemans preferred stock is riskier to investors than its debt yet the yield to investors is lower than the yield to maturity on the debt Does this suggest that you have made a mistake?
Corporate investors own most preferred stock, because 70 percent of preferred dividends received by corporations are nontaxable. Therefore, preferred often has a lower before-tax yield than the before-tax yield on debt issued by the same company. Note, though, that the after-tax yield to a corporate investor and the after-tax cost to the issuer are higher on preferred stock than on debt.
Which funds are high yield funds?
The funds that are high yield funds is a conservatively manage fund,with excellent competitive performance.It is suitable for investors who are looking for yield pick-up within their bond portfolios.
What is the importance of the horizon?
The horizon is point at which the earth curves away from our line of sight at the earth's surface.
What is percentage yield?
The percentage yield indicates how much product is produced in comparison to the maximum mass possible. The percentage of atoms in reactants that create the desired product is known as the reaction's atom economy. Rental yield is the ROI or return of investment that investors get from the property in a year. It calculates how much money you will ultimately earn out of your investment by dividing the yearly rental income by the money invested on the property.
Will a bond's yield to maturity increase or decrease when the bond become subordinated to another debt issue?
The yield to maturity will most likely increase because the bond will be considered more risky. This means investors will demand a higher yield to own it. Of course, the yield to maturity will only be higher if all the payments are actually made and the bond doesn't default.
Are high yield investments a type of Ponzi Scam?
"Ponzi scams are scams that promise to return investors with some kind of profit but does not. High yield investments are not always a Ponzi scam, but one should watch out for warning signs."
