systemically important banks (SIBs) and their idiosyncratic risk factors, macroeconomic factors, and bond features, in the secondary market. Although greater SIB risk levels are expected to increase debt yields (Evanoff and Wall, 2000), prevalence of government safety nets complicates the market ...
Bond pricesfluctuate in the secondary market just like any other security. The main cause of changes in bond prices is changing interest rates. When interest rates rise, bond prices fall, and when interest rates fall, bond prices rise. However, how much bonds change in price with interest rat...
Their main finding: The risk premium (in a single country) has a behavior (one unit root), consistent with the hypothesis that it reflects new market information. Among stripped yields, co-movements of sovereign risk premia were stronger during the period of highest volatility in the Mexican ...
Why are bond prices and yields negatively correlated? Bond yields move in the opposite direction of prices because the bond’s coupon rate is fixed but the appeal of that bond and its coupon rate on the secondary market changes with economic conditions. If interest rates rise, bonds issued wit...
Equity securitiesmay fluctuate in response to news on companies, industries, market conditions and general economic environment. Bondsare subject to interest rate risk. When interest rates rise, bond prices fall; generally the longer a bond's maturity, the more sensitive it is to this risk. Bonds...
certainly reasons for outliers to exist, but if you're aware that the average municipal bond in Cincinnati with a specific coupon rate goes for X dollars on the secondary market, don't be tempted to pay more simply because someone has the audacity to claim they have an outlier for sale. ...
10 As interest rates rise, bond prices in the secondary market fall—and vice versa. Reinvestment risk is related to interest rate risk. It is the possibility that an investor may not be able to reinvest the cash flows received from an investment (such as interest or dividends) at the ...
REACHING FOR YIELD IN THE BOND MARKET Bo Becker Harvard University and NBER Victoria Ivashina Harvard University and NBER First version: May, 2012 This version: December, 2012 Reaching-for-yield—investors’ propensity to buy riskier assets in order to achieve higher yields—is ...
Greece’s sovereign rating by two notches to B1 with a stable outlook on Friday. While Greek debt has outperformed the euro area this year to take yields to a 13-year low, investors are likely to be attracted to the offering since the securities still offer the highest returns in the ...
Kathy Jones and Collin Martin analyze the attractiveness of corporate bond yields, and Liz Ann Sonders interviews Kevin Gordon about sector performance. After you listen Get up-to-the-minute market data and analysis from Schwab experts on social media. ...