YTM(yield to maturity): Interest rate that makes the present value of the bond's payments equal to its price. This yield is sometimes called the bond'syieldfor short. P_B=\sum_{t=1}^{T}\frac{C}{(1+r)^t}+\frac{ParValue}{(1+r)^T} YTM is generally regarded as the average r...
1、Interest Rates and Bond ValuationChapter 6Summer 2008Summer 20081Yunling ChenInterest Rates and Bond ValuaRoadmapBond ValuationTerminologyBasic valuationRelationship Between The Bond Value & YTMWhy the bond price changes?Interest Risk & Default RiskBond Features and TypesInflation, Nominal and Real ...
1、coupon rate：票息率，面值100，年化5%，还款人每年还5块 2、interset rate：可以简单理解成YTM（...
market. Yunling Chen 5 Bond - Coupons • Stated annual interest payment make on a bond. – It is determined upon issuance. Normally, it is expressed as a percentage of par value. – Coupon Payment = Coupon Rate (c) ×Par Value. – Coupon rate is NOT the discount rate for ...
However, Treasury bonds (as well as other types of fixed income investments) are sensitive to interest rate risk, which refers to the possibility that a rise in interest rates will cause the value of the bonds to decline. Bond prices and interest rates move in opposite directions, so when ...
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economic inflation, the market interest rate for the bond may rise due to the fact that investors will expect more cash to offset the decrease in the value of the currency at large. Generally speaking, if a market interest rate exceeds a coupon rate, the value of the bond will likely ...
Term structure（利率期限结构）:关于为什么Term structure of IR一般是upward sloping的几个理论，包括Spot rate vs Forward rate。从公式[公式]我们可以得出：[公式] > [公式]二、债券 特征：Coupon Rate的不同种类：当coupon rate = 市场利率时，债券的价格=Face value(par value)，我们称之为price...
Bond Yield Rate vs. Coupon Rate: An Overview A bond'scoupon rateis the rate of interest it pays annually, while its yield is the rate of return it generates. A bond's coupon rate is expressed as a percentage of its par value. The par value is simply the face value of the bo...
Most bonds pay a fixed interest rate, so existing bonds become more attractive if interest rates fall, driving up demand for them and increasing their market value. If interest rates rise, investors won't want the existing bonds with a lower fixed interest rate, and their prices will decline...