Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
5 Cards in this Set
- Front
- Back
|
What is yield? |
A bond yield is the amount of return an investor realizes on a bond. |
|
|
What is bond's carry? |
The carrying value of a bond is the net amount between the bond's face value and any unamortized premiums or minus any amortized discounts. The carrying value is also commonly referred to as the carrying amount or the book value of the bond. |
|
|
What is Yield Compression/Expansion |
The changing bond prices because of the demand and supply of the bond. This changes the yield as well since high priced bonds have low yields |
|
|
What are losses from default |
This is the amount you would lose if the security goes bankrupt. In this case, if the bond cannot pay back its par value and interest because the bond issuer is bankrupt. |
|
|
What is the formula for expected return? |
E(r) = Yield/Carry + Yield Compression/Expansion + Default Loss |
