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Does the yield to maturity of a bond decrease as the bond nears maturity?
Nope it doesn't you suck
Does the yield to maturity represent the promised or expected return on the bond?
The yield to maturity represents the promised yield on a bond
If a coupon bond is selling at par does the current yield equal its yield to maturity?
Yield usually refers to yield to maturity. If a bond is trading at par it usually means the yield to maturity is equal to the coupon.
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
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
Yield to maturity vs yield to call?
Yield to maturity assumes that the bond is held up to the maturity date. This is a disadvantage. If the bond is a yield to call , it can be called prior to the maturity date. Thus, the ivestor should sell the callable bond prior to maturity if he expects that he will earn higer return by doing so (in other words when yeild to call is higher than held to maturity).
What is a yield to maturity?
A yield to maturity is the internal rate of return on a bond held to maturity, assuming scheduled payment of principal and interest.
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.
What is the difference between yield to maturity and yield to call?
Yield to maturity means the interest rate for which the present value of the bond's payments equals the price. It's considered as the bond's internal rate of return. Yield to. call is a measure of the yield of a bond, to be held until its call date.
Why do bond prices and yields vary inversely?
Bonds are valued by discounting the coupon payments and the final repayment by the yield to maturity on comparable bonds. The bond payments discounted at the bond’s yield to maturity equal the bond price. You may also start with the bond price and ask what interest rate the bond offers. This interest rate that equates the present value of bond payments to the bond price is the yield to maturity. Because present values are lower when discount rates are higher, price and yield to maturity vary inversely.
Compute the current price of the bonds if the present yield to maturity is?
Compute the current price of the bond if percent yield to maturity is 7%
The market interest rate related to a bond is also called the?
"Yield" or "YTM" ("Yield to Maturity")
