Bonds & Fixed Income
2 terms
Term Premium
Bonds & Fixed Income
bps
The extra yield lenders require for holding a longer-maturity bond rather than rolling short-maturity ones.
Term Premium = Long-Maturity Yield - Average Expected Short-Term Rate over the same period
Treasury Bill
Bonds & Fixed Income
%
A short-term government security issued at a discount to face value and redeemed at par, with no coupon.
Yield = [(Face Value - Price) / Price] x (365 / Days to Maturity) x 100