The average rate of return is used to determine the profitability of bondholders’ investments over a specified period of time. Also, you can use it to determine the average cash flow over the life of the bond. You can then determine whether it’s worthwhile for you to continue keeping the...
When computing the weighted average cost of capital (WACC) and assuming a fixed-rate non-callable bond is currently selling above par value, the before-tax cost of debt is closest to the: A.coupon rate. B.yield to maturity. C.current yield. 相关知识点: 试题来源: 解析 B B is correc...
year will be higher than the coupon payment. Furthermore, if an investor bought the bondat par, the average return per year will equal the coupon rate. In this case, the YTM will also equal the coupon rate after dividing the average return per year by the average price of the bond. ...
averagecoupon of an MBS pool has crossed the threshold for refinancing and an acceleration in prepayment speed is observed. Macaulay duration The weighted-averageterm to maturity of the cash flows from the bond, where the weights are the present value of the cash flow divided by the price. Man...
weighted by the percentage of the portfolio that each security constitutes. For example, suppose a portfolio contains twobonds, one worth $10,000 and one worth $20,000, for a total of $30,000. The $10,000 bond matures in five years, and the $20,000 bond in 10 years. The weighted ...
I have bond trading data which consists of trade date, trade (buy/sell), bond issue, coupon, traded yield, traded clean price and traded dirty price. I keep adding the transactions as per those columns. I intend to compute the volume-weighted average (VWA) values per trade row. If it ...
The worst mistake you can make is to base your retirement plans on anunrealistic growth rate. If your pension fund returns fall short then you won’t have put enough away to meet your income needs. What’s a realistic average pension fund growth rate?
Determine the bond’s coupon rate and coupon dollars. The coupon rate is the stated rate of interest on the bond. This rate divided by 2, multiplied by $1,000, equals the coupon dollars. Determine the present value factor using the yield per period, calculated as 1 / (1+i)^t. Divide...
WALA is actually calculated as the inverse of WAM: WAM computes the percentage value of each mortgage or debt instrument in the portfolio. The number of months or years until the bond’smaturityis multiplied by each percentage, and the sum of the subtotals equals the weighted average maturity...
So when you are doing your capital budgeting, to ensure that the shareholders are getting a decent rate of return, you "guess" a cost of retained earnings. How?? One way is CAPM. Another way is the bond yield plus risk premium approach, in which you take the interest rate on the ...