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Questions tagged [yield]

The tag has no usage guidance.

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Comparing values of 5s and 7% notes

I am a beginner in investment. I was reading Security Analysis (Sixth Edition) by Benjamin Graham, and on page 63 the last paragraph is written that: A third kind of analytical conclusion may be ...
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3answers
65 views

How does a bond's coupon rate differ from its market yield rate?

I'm trying to understand how bonds work and am confused by coupon rate vs market yield rate. Suppose company Foo issues a bond with a face value of $1 million, a 4% annual coupon rate payable semi-...
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1answer
33 views

Holding period return and YTM

Suppose I purchased a 2 year bond at par $1000 paying 10% annually. Then the YTM is 10% but the holding period return would be 20%. Shouldn't those 2 values be the same since I am holding the bond to ...
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1answer
40 views

Effective Yield for Bonds

While reading up on the effective yield for bonds I noticed that it relies on the fact that the investor reinvests their coupon earnings in order to take advantage of compound interest. However, does ...
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3answers
122 views

5% Dividend, 20% Price Drop. Whats the point?

This was asked by someone earlier but I did not get the answers. What's the point of buying dividend stocks for yield when the stock's price itself may decline so much more? Here's just one of the ...
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2answers
1k views

Need help with the concept of yield in a fund

There is a high possibility that I misunderstand the concept of yield, but from what I've gathered, are the following discoveries correct? A fund with a share price of $10 that pays a dividend of $0....
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1answer
53 views

How to estimate the profitability and risk of investing in rental properties?

There was a recent question, Is it a good idea, to buy a flat with a loan, whilst using the rent to pay it off?, which was closed due to asking opinion-based advice. However, the question can be ...
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1answer
34 views

How are net income and yield calculated for margin trading?

You have purchased 150 shares at 10 each. You expect to sell these at 15 each. You only managed to sell 100. Out of your initial purchase price, 400$ were borrowed. Brokerage fee= 2% for the ...
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3answers
75 views

Is a bond's price dependent on yield or is it the other way?

Do changes in the price of a bond cause the yield to move? Or is it the change of rates and consideration of other risks that cause the yield to change which then affects the price of the bond?
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1answer
55 views

Understanding the terms that define stock exchange [closed]

So, I am using an API from Equity Market Data to pull in stock exchanges. They do not have a data dictionary. I am trying to understand the meaning behind the column names. Not all the column names ...
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3answers
60 views

Which type of yield do finance professionals refer to when talking about “bond yields”

I am aware that there are many different ways to measure a bonds yield including YTM and the Current Yield. However I am not quite sure which yield is being referred to in a yield curve and other ...
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29 views

Implied credit spread convertible bonds with negative yield

I’m trying to understand what happens to the credit spread of a convertible bond when yields of the convertible are negative. I’ve heard there is an implied credit spread as spreads can’t really be ...
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2answers
185 views

Calculating Yield with Adjusted Closing Price

I have a data set with stock prices and all stock events through time (with adjustment factors for all events). I'm trying to calculate the yield of holding this stock for a period of time (without ...
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2answers
181 views

Bond yields vs interest

At least from the US Treasury, why is there a yield AND interest rate when auctioning notes? https://treasurydirect.gov/indiv/research/indepth/tnotes/res_tnote_rates.htm I'm under the impression ...
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1answer
114 views

If bond yields fall by 1% across all maturities, which of the following bonds will increase in value the most?

10% coupon bond with 15 years to maturity 5% coupon bond with 15 years to maturity 10% coupon bond with 20 years to maturity 5% coupon bond with 20 years to maturity
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2answers
2k views

Can you calculate 10-year Treasury Note yield from price or vice versa?

I grabbed this screenshot from CNBC this morning: Are the price ($98.0469) and yield (2.981%) mathematically related? Investopedia says "A 10-year Treasury note pays interest at a fixed rate once ...
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2answers
278 views

Why are some medium term UK government bond (gilt) prices seemingly so disparate?

Looking at UK government bond prices and picking out one example of what I mean: Coupon Maturity Trading price Treasury 8% 2021 8 07-Jun-21 123.08 Treasury 4,3/4% ...
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1answer
28 views

How is P/E ratio of a bond fund calculated?

According to the Google search of NYSEARCA: HYG, that fund has a P/E ratio of 20.89. Which makes no sense, since bonds have yields (this one currently returns 5.04%), not earnings. So, what does ...
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2answers
824 views

How to calculate the price of a bond based with a yield to Maturity, term and annual interest?

I'm trying to help my nephew with finance but I'm not sure if I fully understand if I have all the necessary details to answer this question. Here's the question: Say you want to purchase a 7%, 15yr ...
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1answer
720 views

Thorough Description of Yield to Maturity?

After some studies for the last month, I have encountered a concept that has just completely eluded me, and that is Yield to Maturity (YTM). Can someone explain the purpose and reasoning behind this ...
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1answer
95 views

Yield curves and Bonds

Just struggling with putting the two together and google seems to be failing me. (1) Are the yields on yield curves annual continuously compounded rates, effective rates or something else like a "...
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1answer
45 views

Which field should I use for getting the income yield of this bond ETF?

I am looking at "iShares Global Corp Bond UCITS ETF" listed on the London Stock Exchange. On the website for this bond ETF, there are fields like; "distribution yield" "flat yield" "Weighted Avg ...
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2answers
177 views

What are the downsides to high-interest savings accounts?

Most US banks offer vanishingly small interest rates on their money market savings accounts, while many others offer rates around 1.0%. Assuming that I keep my deposits below the FDIC insurance limit, ...
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2answers
172 views

When to buy and sell bonds

I am trying to understand the concept of when to buy and sell bonds of countries. I am looking at Greek bonds. In the Financial Times newspaper there was a story saying "Athens' two year bond yield ...
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1answer
9k views

Why bonds with lower coupon rates have higher interest rate risk?

According to the following article: Bonds offering lower coupon rates generally will have higher interest rate risk than similar bonds that offer higher coupon rates. And: For example, ...
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2answers
134 views

Confirm Dividend Yield

I would like to set up a passive income. I was looking at investing in stocks, but I don't know much about it. I am thinking about choosing at least 20 solid companies that pay a good dividend. As an ...
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2answers
782 views

How to read bond yield quotes? What do the time, coupon, price, yield, and time mean?

I am newbie in finance and I recently saw Bloomberg bond yields quoted as follows: Can anyone specify what "1 month" and "1 year" mean? What do coupon, price, yield and time (EDT) mean?
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3answers
714 views

When short negative yielding bonds, who pays the coupon

Assuming the bond was actually issued with a negative coupon, if you are short (borrowing someone else's bond to sell the bond at a lower price / higher yield) Who pays the coupon? There are at ...
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3answers
13k views

How to calculate new price for bond if yield increases

I am learning for a class that is partly about finance and I don't have any background in finance at all. I am struggling with a question that was asked in last years exam: A bond trades at £1015, ...
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2answers
239 views

How do I calculate annualised yield from simple interest paid quarterly?

A one-year bank deposit pays 7.25% per annum simple interest, paid quarterly. In other words, it pays 7.25 / 4 = 1.8125% every quarter, for four quarters. If I were to reinvest this interest, I will ...
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1answer
84 views

What are the risk of high dividend closed end index mutual funds ?

I am finally taking ownership of my retirement my very very small nest egg and I am looking to undertake a value based strategy when it comes to investing. I have been gravitating towards high ...
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3answers
297 views

Why would I buy a bond with a negative yield?

The only reason that I can think of is because I expect the bond to appreciate in price thus offsetting the loss in yield. I could still end up with less money than I started with, if I hold the bond ...
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2answers
764 views

Bond strategies for a steepening yield curve?

If it is believed that the yield curve is going to steepen very soon, it may be fall in short-term rates, a rise in long-term rates, or some combination of these. What strategy should you pursue in ...
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1answer
55 views

How to calculate a mutual fund's yield

Suppose that a generic (and over-simplified) XYZ Mutual Fund is made of N stocks of $25 each. Those stocks pay $0.3 dividends over the year. I already know that yield is calculated by dividing the ...
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2answers
379 views

Calculate APY revolving loan with offset/staggered payment schedule?

I want to buy a weekly meal ticket, 7 lunches for $7, but do not have $7 today. Lender says, "I will loan you a consecutive series of 5 meal tickets for 5 consecutive weeks (35 consecutive lunches as ...
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0answers
531 views

How do you calculate ETF yield when accounting for expense ratio?

I am not sure how to wrap my head around how to calculate the real yield of an ETF using it's distribution yield and gross expense ratio. What I really want to know is, given both ETF A and ETF B are ...
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2answers
130 views

Does a mutual fund's return include fees?

If a mutual fund's published YTD return is 3%, and it has an up-front sales charge of 5% and a 12b1 fee of 2%, are these fees included in the YTD return, or would the "real" return be 3%-5%-2% = -4%?
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3answers
137 views

Is it normal that US Treasury bills(0.07%) yield smaller than interest rate(0.25%)?

I assume that under stable economy, US bonds with longer maturities should yield more. However, the current 3 month bill yields 0.07%( 0.23% for 6 months bills), which is below the overnight interest ...
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1answer
128 views

Yield to Maturity and Daycount Conventions

Daycount conventions quoted on wikipedia etc; 30/360, Act/365 etc. Are there any situations where if you hold two instruments for a year with same coupon but different daycounts they would give you ...
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3answers
3k views

Are a bond's yield and interest rate the same thing?

Are they the same thing? Is yield the annualized return rate? Why when yield rise, yearly return increases, but price falls?
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1answer
43 views

Can I buy a bond at par if I buy it at the time of issuance directly from the issuer

When a company issues bonds, if I buy directly from the company at the time it is being issued, can I hope to buy the bond at par? I am looking at canadian bonds and all of them are selling at premium ...
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1answer
3k views

What does “compression of spreads on high-yield debt” mean?

What did Federal Reserve Chair Janet Yellen mean when she said the following? "We’ve also seen the compression of spreads on high-yield debt, which certainly looks like a reach for yield type of ...
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1answer
102 views

Why does the Fidelity Canadian Bond Fund have such a high beta? How is it measured?

I am looking at some Canadian bond funds (recommendations welcome) for my RRSP. Relatively safe, and with a dividend yield ~ 3% is good enough. While looking at Fidelity bond funds, I came across this ...
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1answer
414 views

Does the growth rate of SPY published by morningstar include the dividend yield

According to morningstar the growth rate for SPY in 2014 was 13.46%. Does this include the dividend yield of SPY ~1.87% or do we need to add this number to the 13.46?
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2answers
122 views

Demand for investment-grade bonds with more than 10% coupon?

Though originally posted as a comment here, I don't see an answer. So please allow me to resurrect and broaden this question, to all investment-grade bonds: in other words, 'BBB- or higher by ...
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2answers
4k views

What's the difference, if any, between stock appreciation and compound interest?

I'm trying to estimate what the returns for a 9% stock appreciation and a 6% dividend reinvestment investment portfolio would look like and I've read compounding isn't the same as dividend ...
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1answer
5k views

What is the best way to calculate total yield on a stock portfolio?

What is the best way to calculate the total yield of a stock portfolio? I started managing my own investments last year and it looks like I leaned towards dividend investing. I am wondering how I ...
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1answer
3k views

Did Greece really issue bonds to investors yielding 42% interest?

I read this in the news regarding Greece's financial crisis: The country’s 10-year bond yield fell 11 basis points to 8.04 percent at 12:26 p.m. in Athens today. While that’s down from a record ...
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2answers
80 views

Please help me understand reasons for differences in Government Bond Yields

First off, I'm completely new to all of this, so please go easy on me. According to http://markets.ft.com/research/Markets/Bonds I notice that the yields on the following government bonds are as ...
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2answers
562 views

Is there a reason to buy a 0% yield bond?

Right now I can get a 1yr government bond that yields 0%. Is there any reason to buy such a bond? E.G. If the broker holding my accounts goes out of business is my "perceived low risk portion" of my ...