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Simple YTM calculation

I'm working the following problem, but getting the wrong answer. Any feedback appreciated. Suppose you bought a five-year zero-coupon Treasury bond for $800 per $1000 face value. Assume the yield to ...
Hank's user avatar
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2 votes
1 answer
1k views

Is the yield of a 30-year bond, issued 29 years ago and maturing in 1 year, equivalent to that of a 1-year bond maturing on the same date?

The question assumes both bonds are US Treasury bonds. I'm seeking clarity on whether the difference in original issuance date and remaining time to maturity impacts yield parity between these bonds. ...
StatsScared's user avatar
0 votes
1 answer
118 views

On coupon rate versus yield

I have seen the following roughly spelled out (or else tacitly used) in a few of my finance textbooks and I was hoping for confirmation and, ideally, a proof: Coupon rate equals APR of yield if and ...
EE18's user avatar
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0 votes
3 answers
70 views

Portfolio performance metrics in presence of cashflow [duplicate]

Given an investment portfolio and a ledger of withdrawls and deposits, I'd like to derive a performance metric that would allow me to compare its performance of a stock index. A randomly generated ...
Angstrom's user avatar
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5 votes
2 answers
797 views

How to think about yield for a annuity of fixed number of years which pays a predefined cashflow each year

Let's say I have an offer to pay $1000 now and for the next 20 years, I will receive the following payments: Year 1: $10 Year 2: $20 Year 3: $30 Year 4: $40 Year 5: $50 Year 6: $60 Year 7: $70 Year 8: ...
pathikrit's user avatar
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1 vote
1 answer
175 views

Why MBS has lower YTM than treasury bonds?

I just checked, VMBS (Vanguard MBS) has yield of 3.73%, but VGLT (Vanguard government long term bond) has yield of 5.08%. I thought MBS is riskier and would require higher YTM by the market.
ZEWEI CHU's user avatar
  • 111
0 votes
2 answers
156 views

What drives a yield curve shape?

I understand there are many factors that affect yield curve shape, let me help understand one. One is that 30y rate is an average 2y rate for the next 30y, with some additional premium. That premium ...
Medan's user avatar
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2 votes
1 answer
416 views

Understanding Implications of Return of Capital?

There is an ETF/fund I was looking at and I noticed a curious mix of what goes into their regular "dividend" payout. The amount consists of dividend income + long/short capital gains, and ...
AA040371's user avatar
  • 353
0 votes
1 answer
939 views

How to read CDs: price vs yield vs bid vs ask?

I'm trying to understand CDs by comparing the two: NAME CLOSING PRICE CLOSING YIELD CURRENT BID YIELD CURRENT BID PRICE CURRENT ASK YIELD CURRENT ASK PRICE Mountain Commerce Bank 99.68 5.694% 99....
Danijel's user avatar
  • 298
2 votes
0 answers
51 views

What is the difference between 7-day yield and gross 7-day yield of a money market fund?

Federated Hermes Government Reserves Fund Class A (GRAXX) has a 7-day yield of 3.96 while it has a gross 7-day yield of 4.84. I wonder what is the difference between two attributes and how are these ...
KnowledgeSeeeker's user avatar
9 votes
4 answers
4k views

What's up with banks closing down their high yield savings accounts and incentives lately?

We had been keeping our cash savings in a Purepoint high yield savings account for the past few years, until we got this email from them a couple months ago: "We’re reaching out to let you know ...
mafundly's user avatar
1 vote
2 answers
106 views

How is the yield of this particular bond calculated?

I am looking at this particular bond of coinbase company via Interactive Brokers website. Coinbase Bond ISIN : USU19328AA89 The rate of the bond is 3.4 so at the ask price of the bond at 62 the yield ...
Saugat Awale's user avatar
-3 votes
3 answers
353 views

Why is YTW (Yield-to-Worst) not available for some callable bonds?

E.g., I am looking at 67765QDG8 ("Oh St Wtr Dev Auth REV 5% 06/01/2023") on Schwab. It is callable but the yield to worse isn't indicated: Bond details: https://i.sstatic.net/GNt20.jpg (&...
Franck Dernoncourt's user avatar
24 votes
3 answers
6k views

If US Treasuries at yielding 4-5% right now, why can't I find an ETF that yields that amount?

If US Treasuries at yielding 4-5% right now, why can't I find a 1 month US Bond ETF or 6 month US Bond ETF that yields 4-5%? The best I can find is SGOV but it only yields 2%. Picture of US yields on ...
Katsu's user avatar
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0 votes
1 answer
157 views

Where can I find the indicative yield of soon-to-be-issued Treasury bonds on Charles Schwab?

In Vanguard, one may see the indicative yield of soon-to-be-issued Treasury bonds on https://personal.vanguard.com/us/FixedIncomeTrading: Where can I find the indicative yield for soon-to-be-issued ...
Franck Dernoncourt's user avatar
0 votes
1 answer
250 views

How to think about ROI vs yield

Something I have been struggling with recently is how to evaluate investments based on yield vs ROI considerations. The reason I struggle with it is that I get conflicting answers where the investment ...
mxk's user avatar
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0 votes
1 answer
65 views

How can one compare the yield of a municipal money fund with the yield of a municipal bond?

Let's consider the following municipal money fund and the following municipal bond: The Schwab Municipal Money Fund (Investor Shares) (SWTXX) discloses a 7-day yield (with waivers) as of 02/28/2023 ...
Franck Dernoncourt's user avatar
1 vote
1 answer
155 views

What accounts for the difference in yield to maturity (YTM) between brokered CDs and US Treasuries?

Looking at the Charles Schwab table below dated 2023-02-24 on the yield to maturity (YTM) for different brokered CDs and bonds, I see that for when the maturity is 1 year or higher, brokered CDs have ...
Franck Dernoncourt's user avatar
3 votes
1 answer
896 views

Treasury Yields -- Quoted on an Investment Basis vs. Discount Basis

I'm looking at the St. Louis Fed website's historical data for the 1-year treasury. There are two different but similar pages. One is titled: 1-Year Treasury Bill Secondary Market Rate, Discount Basis ...
PintoBox's user avatar
2 votes
1 answer
47 views

How is the Price/Yield Duality Affected By Time?

A rise in interest rates causes a rise in bond yields which means their price goes down. And the opposite, of course. What I'm trying to understand is how the price of an ETF will change after the ...
Brian White's user avatar
7 votes
1 answer
780 views

Is the US market really expecting less than 3% yearly inflation over the next 5 years?

Several people in my family are fearful of upcoming high inflation, perhaps due to the relatively high US inflation figures reported in the last few months (8%+). They think that the US inflation rate ...
Flux's user avatar
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1 vote
1 answer
87 views

Yield curve to price bonds

I am having a hard time finding books/materials that would teach yield curve pricing using real-world problems/examples I would like to understand if can I use the below treasury yield data (I believe ...
Skittles's user avatar
1 vote
2 answers
135 views

What would be the instrument/index with the most historical data available for something similar to TLT aka a bonds fund? [closed]

I would like to have as much historical data as possible regarding a bonds fund performance similar to the iShares 20+ Year Treasury Bond ETF (TLT). For now I have this source but it goes back to only ...
Bruno's user avatar
  • 21
1 vote
1 answer
167 views

Proper Way To Price a Bond Paying a Semi-Annual Coupon

Let's say you have a 10-year bond with a $100 face value that with a coupon rate of 10%, paid semi annually. The bond is currently price at $105. Which is the proper way of calculating the yield to ...
SwiftySwift's user avatar
1 vote
3 answers
3k views

Why don’t broker-dealers borrow against their clients’ stock holdings instead of lending them?

From what I understand, a common business line of brokerages is lending out the shares of their clients while they are sitting idly in their accounts. Average borrow rates of blue-chips are around 0....
actinidia's user avatar
  • 159
2 votes
1 answer
277 views

What is the correct formula for Bond Yield?

Taking an introductory investment course, was following up on bond yields. I thought the yield is calculated as follows (sorry for some reason LaTex formatting doesn't work - so inserting an image): ...
hba's user avatar
  • 177
4 votes
1 answer
333 views

How do I calculate the performance of a stock investment in the presence of dividends, additional investment and partial sales?

What is a single metric I can use to calculate the performance of a stock investment in the presence of dividends, additional investment, and partial sales? Such a metric should be comparable across ...
Flux's user avatar
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1 vote
0 answers
47 views

Need help understanding bond yield outliers

I was looking at bond yields on Fidelity and noticed a few outliers. The tables below show the 'Highest' and 'Median' yields. Note the outliers - Agency/GSE 10yr and Corp AAA 2yr - where the highest ...
hojusaram's user avatar
  • 111
2 votes
1 answer
136 views

Why are long term bonds subjected to a higher volatility, as well as higher yield than short term bonds?

Why are long term bonds subjected to a higher volatility, as well as higher yield than short term bonds? (Assuming normal yield curve). Say, I have 2 investment options and my investment horizon is 2 ...
mxmx's user avatar
  • 21
3 votes
1 answer
222 views

Why is there a sell off of US bonds if interest rates in the US are currently rising?

My understanding is that as interest rates go up, the yield offered by bonds also increases (in response). If the yield of bond increases, then why are people selling bonds?
StatsScared's user avatar
0 votes
2 answers
79 views

Why people prefer VRE instead of HHL.B with higher dividend yield

Good day , I am new to stock market , so I am sorry in advance for my poor knowledge. My Canadian financial advisor told me that secure way to get dividends from stocks is to buy dividend ETFs ...
Almas Abdrazak's user avatar
1 vote
2 answers
98 views

Why do raising short-term yields indicate that the economy is about to enter a recession?

Below is the excerpt from the article Term Structure Of Interest Rates Downward sloping — short-term yields are higher than long-term yields. Dubbed as an "inverted" yield curve and ...
Daniel's user avatar
  • 185
2 votes
0 answers
91 views

Why do we have *daily* series of T-bill yields?

I understand that each week the US Treasury issues new T-bills at different maturities (1-month, 3-months, 1-year, etc). As far as I understand, this issuance happens every Tuesday. After the auction, ...
Raul Guarini Riva's user avatar
1 vote
2 answers
77 views

Compute coupon of treasuries

How do you compute coupon starting from yield and price? Since yield is coupon / par, which is 2 / 100 in this case, would it just be yield * price, 0.01906 * (102 + 1 / 32) with the data below? ...
asdasd's user avatar
  • 11
0 votes
3 answers
89 views

Where is the share price located once Apple releases its Form 10-K? Using for dividend yield calculation and need the price they used

I need to find dividend yield for Apple at the release of their 2020 annual report, Form 10-K. That's it. I can't find it anywhere.
ewbrowning's user avatar
0 votes
1 answer
48 views

Positive movement vs negative movement of bond market yield

In the example on this page, a yield was issued at a yield of 7.18% at the beginning of a year and was forecasted to have a yield of 6.8% at the end of a year. The resulting value gain from the ...
Aqqqq's user avatar
  • 161
3 votes
1 answer
139 views

Ask & Bid yield calculation problem

Does anyone know how the ask and bid yields are calculated on this corporate bond? I tried to use BEY calculation but I keep arriving at different answers. Does anyone know what the $500K means? If ...
Ron Jab's user avatar
  • 31
2 votes
1 answer
129 views

TNote 10yr Futures YTM vs market yield?

I understand how to calculate the yield on a 10 yr TNote based on face, price & coupon. I don’t understand why the yield (and price) on a futures contract about to expire is so different than the ...
RiskIt's user avatar
  • 21
0 votes
1 answer
343 views

How to calculate the new price of a bond if its YTM increases?

I'm trying to calculate the current price of a corporate bond one year after its YTM has changed. A corporate bond was issued at 01/01/2010, has the following caracteristics: A face value of 5000$. ...
Blg Khalil's user avatar
2 votes
2 answers
73 views

What is the best way to interpret changes in Treasury yields?

My question is quick and simple. However, I would like to use this answer to further my understanding of bonds and yields. If the YTM on a 10yr Note yesterday was 1.00% and the YTM on the same 10yr ...
Andrew Warner's user avatar
3 votes
2 answers
275 views

Logic behind inverse relationship between bond rate and interest rate

I've been reading that there is an inverse relationship between fixed-rate bonds and interest rate. The explanation behind the reasoning is that as interest rates move, the bond has to compete with ...
FettFrank's user avatar
  • 133
0 votes
0 answers
24 views

Performance of an investment when contribution values are variable

Every two weeks in 2020 (thus, 26 times), I've contributed some money (usually about $200, but sometimes more or less) to a bond fund. The starting value was $21000 and the current value is $28500. ...
RonJohn's user avatar
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0 votes
1 answer
159 views

Is using the Compound dapp a safe/effective way to earn interest?

Gonna preface this with saying I am not sure precisely on what exchange this should go. The question is more about DeFi than it is about Bitcoin, so the Bitcoin exchange is not the right place. The ...
Runeaway3's user avatar
  • 2,898
0 votes
0 answers
47 views

Calculating bond duration and price change when yield changes

I've been working on this forever and I'm still not sure if my answers are correct. My question is: A 10 year bond with a face value of $1000 paying semi-annual 7% coupon. Bond is paying 7% YTM. ...
Roger's user avatar
  • 1
0 votes
1 answer
2k views

Difference between 7-Day Yield and Average Annual Total Returns?

I'm looking at "FIDELITY GOVERNMENT MONEY MARKET" and there's two numbers: 0.01% 7-Day Yield and 0.75% Average Annual Total Returns. I don't understand the difference between these two ...
JobHunter69's user avatar
0 votes
1 answer
716 views

Given two similar bonds, is the one with a higher yield to maturity (YTM) always a better investment?

Consider two bonds that have the same issuer, seniority, credit rating, and maturity date. My question is about the comparability of their yield to maturity (YTM): if one bond has a higher YTM the ...
Flux's user avatar
  • 17.1k
2 votes
0 answers
68 views

What drives long duration US Treasury Bond ETF prices?

I am looking at TLT, for example, a long duration (with average maturity around 25 years) bond ETF. I noticed that the fed funds rate (or the "interest rate" from federal reserve) has been ...
Dzt's user avatar
  • 291
0 votes
1 answer
47 views

Why is a put on yields equivalent to a call on bonds?

Nassim Taleb makes the following assertion in Dynamic Hedging: A put on yields is a call on bonds, a matter of confusing importance. But I struggle to understand why that is the case. If I buy a put,...
Paul Razvan Berg's user avatar
0 votes
1 answer
161 views

Difference between the Interest rate of bond and the interest rate of central bank

Does the increase or decrease of the Interest rate (coupon rate) of bonds have the same effect as rising or falling interest rate of the central bank on the economy? In other words when we say that ...
noobforever's user avatar
0 votes
2 answers
84 views

How to read/decipher the percent % in a bond's interest versus coupon rate question or example

I was studying about bonds, more so accreted/coupon bonds that were discounted. As far as I know and believe to be true is that when a question says: 1) Q. "Mr. Dancer purchases a 5-percent ...
user3553260's user avatar