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Bonds & Fixed Income

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Bonds & Fixed Income

Yield Curve

A plot of yields on bonds of the same credit quality across different maturities.

Test: yields on identical-credit instruments are plotted against their residual maturities at a single point in time % Bonds & Fixed Income

Yield to Call

The return on a bond assuming the issuer redeems it at the earliest call date rather than at maturity.

Same calculation as yield to maturity, using the call date and call price in place of the maturity date and face value % Bonds & Fixed Income

Yield to Maturity

The total annualised return from holding a bond to maturity, accounting for coupons, the purchase price and the redemption amount.

Approximate YTM = [Annual Coupon + (Face Value - Price) / Years to Maturity] / [(Face Value + Price) / 2] %