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Yield to put (YTP): same as yield to call, but when the bond holder has the option to sell the bond back to the issuer at a fixed price on specified date. Yield to worst (YTW): when a bond is callable, puttable, exchangeable, or has other features, the yield to worst is the lowest yield of yield to maturity, yield to call, yield to put, and others.
In finance, the yield on a security is a measure of the ex-ante return to a holder of the security. It is one component of return on an investment, the other component being the change in the market price of the security. It is a measure applied to fixed income securities, common stocks, preferred stocks, convertible stocks and bonds, annuities ...
Duration (finance) In finance, the duration of a financial asset that consists of fixed cash flows, such as a bond, is the weighted average of the times until those fixed cash flows are received. When the price of an asset is considered as a function of yield, duration also measures the price sensitivity to yield, the rate of change of price ...
Both play a key role in determining which security to buy. A bond price explains the current value of the purchase with its future value in mind. In contrast, the yield explains the estimated ...
Cons. 1. Potentially lower returns. Because of their relative safety, fixed-income investments typically earn lower returns than riskier assets like stocks. And that means you may be missing out ...
This fund has a rock-bottom 0.06% expense ratio and a 4.2% current yield, ... so this implies that I should have about 68% stock exposure and 32% of my money in fixed-income instruments like these ...
t. e. In finance, bond convexity is a measure of the non-linear relationship of bond prices to changes in interest rates, and is defined as the second derivative of the price of the bond with respect to interest rates (duration is the first derivative). In general, the higher the duration, the more sensitive the bond price is to the change in ...
Historically, one of the most important drivers of return in fixed-income portfolios has been the yield curve, and many investment strategies are expressed in terms of changes in the curve. Any discussion of fixed-income attribution therefore requires an appreciation of how changes in the curve are described, and their effect on the performance ...
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