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For example, a discount bond will increase in price toward par value as it nears maturity, all else equal. Meanwhile, a premium bond will decrease in price toward par value as maturity nears. Then ...
Lacker dissented, preferring a 25 basis point increase. First vote from Frederic Mishkin after his appointment. Official statement: August 8, 2006 5.25% 6.25% 9–1 The Fed kept rates stable this meeting; they had raised the rates by 25 basis points for seventeen consecutive meetings prior. Lacker dissented, preferring a 25 basis point increase.
Then continuing by trial and error, a bond gain of 5.53 divided by a bond price of 99.47 produces a yield to maturity of 5.56%. Also, the bond gain and the bond price add up to 105. Finally, a one-year zero-coupon bond of $105 and with a yield to maturity of 5.56%, calculates at a price of 105 / 1.0556^1 or 99.47.
The producer price index released a day earlier on January 14 reported a modest 0.3% increase in wholesale prices in December, rising 3.3% year over year, up from 3% in November.
In a positively sloped yield curve, lenders profit from the passage of time since yields decrease as bonds get closer to maturity (as yield decreases, price increases); this is known as rolldown and is a significant component of profit in fixed-income investing (i.e., buying and selling, not necessarily holding to maturity), particularly if the ...
A bump-up CD — also called a “raise your rate” CD — builds in the ability for you to request a one-time rate increase if CD rates go up during your lock-in term. Longer term CD accounts ...
The Bloomberg US Aggregate Bond Index, or the Agg, is a broad base, market capitalization-weighted bond market index representing intermediate term investment grade bonds traded in the United States.
Inflation increased 0.4 percent in February, according to the most recent Consumer Price Index (CPI) release published by the U.S. Bureau of Labor Statistics. Over the last 12 months, inflation ...