Search results
Results from the WOW.Com Content Network
In finance, a bullet strategy is followed by a trader investing in intermediate-duration bonds, but not in long- and short-duration bonds. [1]The bullet strategy is based on the acquisition of a number of different types of securities over an extended period of time, but with all the securities maturing around the same target date. [2]
Interest rate risk is the risk that arises for bond owners from fluctuating interest rates. How much interest rate risk a bond has depends on how sensitive its price is to interest rate changes in the market. The sensitivity depends on two things, the bond's time to maturity, and the coupon rate of the bond. [1]
Here are a few key terms you’ll need to know before investing bonds: Maturity: A specific date by which your principal loan must be repaid. This date is set at the beginning of the bond’s term ...
Bond valuation is the process by which an investor arrives at an estimate of the theoretical fair value, or intrinsic worth, of a bond.As with any security or capital investment, the theoretical fair value of a bond is the present value of the stream of cash flows it is expected to generate.
Investment-grade bonds aren’t inherently better than high-yield bonds, it just depends on why you’re buying bonds. If you have a high risk tolerance or a long time before retirement, for ...
Bonds are a contract between an investor and whoever is issuing the bond — be it a company or government — where the issuer agrees to pay the investor a specified amount over a set period of time.
The risk premium represents the compensation awarded to the equity holder for taking on a higher risk by investing in equities rather than government bonds. [1] However, the 5% to 8% premium is considered to be an implausibly high difference and the equity premium puzzle refers to the unexplained reasons driving this disparity.
For premium support please call: 800-290-4726 more ways to reach us