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The forward rate is the future yield on a bond. It is calculated using the yield curve . For example, the yield on a three-month Treasury bill six months from now is a forward rate .
The British pound yield curve on February 9, 2005. This curve is unusual (inverted) in that long-term rates are lower than short-term ones. Yield curves are usually upward sloping asymptotically: the longer the maturity, the higher the yield, with diminishing marginal increases (that is, as one moves to the right, the curve flattens out).
A "five-year Euribor" will be in fact referring to the 5-year swap rate vs 6-month Euribor. "Euribor + x basis points", when talking about a bond, will mean that the bond's cash flows have to be discounted on the swaps' zero-coupon yield curve shifted by x basis points in order to equal the bond's actual market price.
Right now, the national average rate for a 6-month CD is 1.57% and the average rate for a 12-month CD is 1.81%. These are not good rates. Here's what that looks like in real money on a 6-month CD ...
Today's best rates of returns are found at FDIC-insured digital banks and online accounts paying out a limited promotion of up to 5.25% APY on a 10-month CD at Langley Federal Credit Union and up ...
But Harvey said the lead time has historically ranged from six to 23 months. Meanwhile, the inverted yield curve has recently changed to become a "causal mechanism" that can slow economic growth ...
Even though the yield-to-maturity for the remaining life of the bond is just 7%, and the yield-to-maturity bargained for when the bond was purchased was only 10%, the annualized return earned over the first 10 years is 16.25%. This can be found by evaluating (1+i) from the equation (1+i) 10 = (25.84/5.73), giving 0.1625.
High-yield savings accounts continue delivering impressive returns, with top-yielding accounts offering up to 5.10% APY, more than 10 times higher than traditional savings accounts.