Susan Bondy
Bonds can trade at a premium or discount to the face or maturity value. Once a bond is issued, it pays a fixed amount of interest, called the coupon rate. Premium and discount prices are how the bond market adjusts current bond yields to the coupon rate paid by the bond. To calculate...
Calculate the effective maturity rate of a portfolio of different bonds by weighing each bond against its share of the total value of the portfolio and multiplying it by its yield. Add all the weighted yields of bonds in the portfolio to arrive at the maturity rate of the portfolio. Reference...
the Fed has achieved this so-called “soft landing” for the economy, but the Fed continues to walk an economic tightrope. “The overriding pressures on Treasury yields are the Fed, Treasury supply and then growth and inflation,” says Tom Hainlin, senior investment strategist, U.S. Bank We...
Treasury yield curve. Treasury yields are influenced by the Fed funds rate, or the interest rate at which banks trade federal funds (balances held at Federal Reserve Banks) with each other overnight. The market determines that rate, but it’s influenced by the Fed funds target rate that the...
Since we focus our analysis on the spread between GIIPS yields and Germany, credit ratings are also calculated as the respective spreads. Since Germany consistently receives the highest rating throughout the sample period, a higher rating spread indicates a greater credit risk for the country ...
Generally, yield is calculated by dividing the dividends or interest received on a set period of time by either the amount originally invested or by its current
Treasury bills usually pay the lowest relative rates of all the various Treasury securities. In some instances, however, short-term bills can offer higher yields than longer-term notes or bonds. This is called a yield-curve inversion. On a graph of yields vs. term length, yields generally cu...
Factors Affecting Treasury Yields As the previous example demonstrates, the yield on a bond rises when the purchase price of the bond drops. T-bond purchase prices are determined by the supply and demand for Treasury debt. Prices are bid up when there are more buyers in the market. Treasury ...
Value fundsinvest in stocks their managers see as undervalued while aiming at long-term appreciation when the market recognizes the stocks' true worth. These companies are characterized by low price-to-earnings (P/E) ratios, low price-to-book ratios, and dividend yields. Meanwhile, growth funds...