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Search results for 'yield'

October 15, 2016

A higher dividend yield reduces the value of an option and thus ____ resulting in ____.

Option Expense The lower expense results in higher earnings for the firm granting the options.

May 28, 2016

Market participants prefer the swap-rate curve over the government bond yield curve because?

The availability of swaps and the equilibrium pricing are driven only by the interaction of supply and demand. It is not affected by technical market factors. The swap market is not regulated which makes swap rates across different countries comparable. Swap curves across countries are more comparable than sovereign bond yield curves because swap curves […]

May 7, 2016

Convenience Yield

Convenience yield is the monetary benefit from holding a commodity physically instead of being long the respective futures and is affected significantly by inventory levels. A supply surplus lowers the spot price and also the convenience yield.

January 5, 2016

As yields fall the value of a non-callable bond is greater or less than a callable bond?

GREATER The value of a non-callable bond increases by more than the callable bond because the value of the call goes up. Callable Bond = Non-callable bond – call value

January 4, 2016

Market Dividend Yield (D/P) & Justified Do/Po

trailing D/P = 4 * most recent quarterly DIV / market price per share leading D/P = next 4 quarters forces DIVs / market price per share D0/Po = (r – g) / (1 + g)

July 19, 2012

Yield Curve Risk

Bonds with different maturity dates are more or less sensitive to changes in the market interest rate depending on the time until they mature. Bonds most at risk are long term with a low coupon.

July 19, 2012

Discount Yield & Price Formula for T-Bills

Discount Yield = [(Face Value – Price) / Face Value] Days to maturity in a 360 day year is convention. BEY is more accurate. Can possibly be simplified further to: (1-P)(360/NSM) = Discount Yield

July 19, 2012

Yield Ratio

Yield Ratio = Yield on bond X / Yield on bond Y In the U.S. the yield on bond Y is frequently the on-the-run U.S. Treasury Bond.

July 19, 2012

Yield to Maturity definition

Is simply the IRR of all future cash flows from the bond.

July 19, 2012

Yield on Treasury Bills on a discount basis

d = (1 – P)(360 / Nsm) P = settlement price per $1 of maturity value Nsm = number of days between settlement date and the maturity date d = yield on a discount basis