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Search results for 'yield'

June 12, 2018

The much higher credit loss rate experienced with high-yield bonds results in an emphasis on ____ and ____ when evaluating a position.

The much higher credit loss rate experience with high-yield bonds results in an emphasis on credit risk and market value when evaluating a position. Advertisements

June 12, 2018

Investment-grade bonds have lower ____ and ____ risks than high-yield bonds and are more sensitive to ____ and ____ which causes ____.

Investment-grade bonds have lower credit and default risks than high-yield bonds and are more sensitive to interest rate changes and credit migration which causes credit spread volatility.

May 14, 2018

As credit spreads narrow and yields experience a downward parallel shift, corporate callable bonds trading at par ____ corporate non-callable bonds of the same maturity and credit quality.

Callable corporate bonds at par underperform corporate non-callable bonds because callable bonds have shorter duration, lower (possibly negative) convexity and higher probability the call is exercised.

May 1, 2018

Spread duration is a measure of risk that is ____ useful for high-yield bonds than for investment-grade bonds.

Spread duration is a measure of risk that is less useful for high-yield bonds than for investment-grade bonds. Credit spread volatility is more relevant for investment-grade bonds. Credit default loss is more relevant for high-yield bonds.

April 30, 2018

A flat yield curve is consistent with a ____ monetary policy and a ____ fiscal policy.

A flat yield curve is consistent with a tight monetary policy and a loose fiscal policy.

April 30, 2018

Under the Fed model if forward earnings yield is lower than long term government treasury yields than the equity market is most likely:

Overvalued

April 30, 2018

Under the Fed model if forward earnings yield is greater than long term government treasury yields than the equity market is most likely:

Undervalued

April 30, 2018

When two currencies are pegged the bond yields of the country with the ____ currency are nearly always ____.

The weaker currency has higher bond yields unless the market is extremely confident that the government will hold the peg.

February 19, 2018

The sensitivity of the futures price to a yield change (formula)

Δf ≈ – Modified Duration of the futures * futures price * basis point change in the implied yield on the futures.

February 3, 2018

High-yield bonds have ____ exposure to interest rate risk than investment grade bonds.

Less High-yield portfolio managers are more likely to focus on credit risk and less likely to focus on interest rate and yield curve dynamics.