2.All other things being equal, the lower the coupon rate, the greater the interest rate risk....
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(...
40、-year Government Loan Vs. 30-year Government Loan30-year Government Loan (interest rate risk)5-year bond with 8% coupon Vs. 5-year bond with 12% coupon5-year bond with 8% coupon (interest rate risk)Secured bond Vs. unsecured bondUnsecured bond (default risk)Subordinated debt Vs. sen...
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 ...
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 ...
What's the difference between 'fascism' and 'socialism'? More Commonly Misspelled Words Words You Always Have to Look Up Your vs. You're: How to Use Them Correctly Popular in Wordplay See All More Words with Remarkable Origins 8 Words with Fascinating Histories ...
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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...
When people refer to "the national interest rate" or "the Fed rate," they're usually referring to thefederal funds rateset by the Federal Open Market Committee (FOMC). This is the rate of interest charged for the interbank transfer of money held by the Federal Reserve. It is used as a...
The prevailing market interest rates affect the coupon rate of a bond, and this, ultimately, affects the price of the bond. As a rule of thumb, if a coupon rate is higher than the prevailing market interest rate, the bond's price rises; if the coupon is lower, the bond's price falls...