25 ++ yield to maturity of a bond is best described as 167370-Yield to maturity of a bond is best described as

The yield to maturity of a bond reflects a bond's total return, including both interest payments and the increase or decrease in the value of the bond at maturity Bond prices trade with an inverse relationship to interest rates, so if a bond's price goes down, its yield to maturity goes upQuestion Effect Of Yield To Maturity On Bond Price (LO3) Tom Cruise Lines, Inc, Issued Bonds Five Years Ago At $1,000 Per Bond These Bonds Had A 25year Life When Issued And The Annual Interest Payment Was Then 12 Percent This Return Was In Line With The Required Returns By Bondholders At That Point As Described Below Real Rate Of Return 3% Inflation PremiumYield to maturity is considered a longterm bond yield but is expressed as an annual rate In other words, it is the internal rate of return of an investment in a bond if the investor holds the bond until maturity and if all payments are made as scheduled

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Yield to maturity of a bond is best described as

Yield to maturity of a bond is best described as-We will discuss each of these in turn below In the bond valuation tutorial, we used an example bond that we will use again here The bond has a face value of $1,000, a coupon rate of 8% per year paidThe expected rate of return on a bond can be described using any (or all) of three measures Current Yield;

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Yield to Maturity The yield to maturity is the yield an investor would receive if they held the bond to the maturity date This is a similar calculation to the yield to call, except that you don't use the call price—the face value is usedA savings bond is an example of a zerocoupon bond because the interest payments are added to the bond's principal value, rather than paid out periodically Holders can check savings bond maturityBondequivalent yield is closest to A)75% B)12% C)30% 6 A spot rate curve is most accurately described as yields to maturity for A)Zerocoupon bonds B)Government bonds C)Money market securities 7 A yield curve for coupon bonds is composed of yields on bonds with similar A)Maturities B)Issuers C)Coupon rates 8

Yield curves are rarely straight lines, so this shift may also be described as "shapepreserving" shift to the yield curve Given a parallel shift to the yield curve, the yieldtomaturity and coupon reinvestment rates are assumed to change by the same amount and in the same directionWe will discuss each of these in turn below In the bond valuation tutorial, we used an example bond that we will use again here The bond has a face value of $1,000, a coupon rate of 8% per year paid1Yield to maturity on a bond with price equal to its par value will _____ The price of a bond with a fixed coupon rate and the required return have a relationship that is best described as _____ a direct b inverse c perfect positive correlation d constant Expert Answer 100% (2 ratings)

The current yield is the bond interest rate as a percentage of the current price of the bond The yield to maturity is an estimate of what an investor will receive if the bond is held to itsYield to Maturity The yield to maturity is a principal feature of a debt instrument such as a bond It describes the return earned by an individual or an entity holding a given bond under theYieldtoMaturity (YTM) is the rate of return you receive if you hold a bond to maturity and reinvest all the interest payments at the YTM rate It is calculated by taking into account the total amount of interest you will receive over time, your purchase price (the amount of capital you invested), the face amount (or amount you will be paid

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Coupon yield, as described above, is the annual payment expressed as a percentage of the bond's face value Current yield is the annual interest payment calculated as a percentage of the bond'sYield to Maturity The yield to maturity is a principal feature of a debt instrument such as a bond It describes the return earned by an individual or an entity holding a given bond under theYield to Maturity (YTM), also known as book yield or redemption yield, of a bond or other fixedinterest security The yield to maturity (IRR) is nothing but the interest rate earned by an investor who buys the bond today at the market price, assuming that the bond is held until maturity and that all coupon and principal payments are made on schedule

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The yield spread of a specific bond over the standard swap rate in that currency of the same tenor is best described as the aIspread bZspread cGspread Downloaded by Victoria Duong (duongvictoria@hotmailcom) You've reached the end of your free preview Want to read all 3 pages?We will discuss each of these in turn below In the bond valuation tutorial, we used an example bond that we will use again here The bond has a face value of $1,000, a coupon rate of 8% per year paidYield to call can potentially be a higher or lower yield than the yield to maturity, depending on if the bond gets purchased at a premium or a discount to the par value Rather, yield to worst will always be lower than the yield to maturity because it is calculated for bonds that get purchased at a premium to par value

Yield To Maturity Formula Step By Step Calculation With Examples

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Yield to Maturity (YTM), also known as book yield or redemption yield, of a bond or other fixedinterest security The yield to maturity (IRR) is nothing but the interest rate earned by an investor who buys the bond today at the market price, assuming that the bond is held until maturity and that all coupon and principal payments are made on scheduleBondequivalent yield is closest to A)75% B)12% C)30% 6 A spot rate curve is most accurately described as yields to maturity for A)Zerocoupon bonds B)Government bonds C)Money market securities 7 A yield curve for coupon bonds is composed of yields on bonds with similar A)Maturities B)Issuers C)Coupon rates 8The expected rate of return on a bond can be described using any (or all) of three measures Current Yield;

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We will discuss each of these in turn below In the bond valuation tutorial, we used an example bond that we will use again here The bond has a face value of $1,000, a coupon rate of 8% per year paidYield to worst 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 For instance, you buy ABC Company bond which matures in 1 year and has a 5% interest rate (coupon) and has a par value of $100The yield to maturity of a bond reflects a bond's total return, including both interest payments and the increase or decrease in the value of the bond at maturity Bond prices trade with an inverse relationship to interest rates, so if a bond's price goes down, its yield to maturity goes up

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Considering Yield To Worst

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Incoming Term: yield to maturity of a bond is best described as,