Bonds

Bond Credit Rating

Credit Rating Reliability of a bond issuer. Credit ratings are usually inversely related to return on investment. Credit risk models rely on both characteristics of bond and the issuer/borrower Third party credit rating agencies providing this service are Moody’s, Standard and Poor’s (S&P), and Fitch.  CRAs perform analysis of bond Read more…

Bonds

Yield Spread Of A Bond

A yield spread is the difference between yields on differing debt instruments of varying maturities, credit ratings and risk, calculated by deducting the yield of one instrument from anotherA yield spread is the difference between yields on differing debt instruments of varying maturities, credit ratings and risk, calculated by deducting Read more…

Bonds

Bond Yield

* ) Calculation of all the coupons * ) Calculation of all the coupons * ) Difference between par and discount/premium * ) Market prices of bonds are expressed in terms of yields, which make the bond called expensive or cheap. *) Yield has an inverse relation to bond price. Read more…

Bonds

Types of Government Bonds

Treasury bills: “T-bills” have the shortest maturities — 13 weeks, 26 weeks, and one year. You buy them at a discount to their $10,000 face value and receive the full $10,000 at maturity. The difference reflects the interest you earn. Treasury notes: These mature in two to 10 years. Interest Read more…