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4 Cards in this Set
- Front
- Back
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which is the biggest Fixed Income Market in the world ?
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United States
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Price Volatility of Bond relationship with its Maturity ?
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Price Volatility of the bond is a function of its maturity. Modified Duration Formula. with all other constanct. longer the maturity of the bond, greater the price volatility resulting in the change in interest rate.
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what are inverse floters or reverse floters ?
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typically, the coupon formula for floater is such that coupon rate increase/decreases when reference rate increases/decreases. there are issues whose coupon rate move in other directions . they are called reverese or inverse floters example :
coupon rate = k - l * (ref. rate) where k and l are the values specified in the prospectus for the issue. |
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full price or dirty price
and clean price ? |
the amount buyer pays to a seller =
clean price + accrued interest = full price (or dirty price) |
