Explain why the expected return on the corporate bond does not equal its yield to maturity
Global financial management to another higher variance portfolio with an equal expected return variance portfolio and what is its expected return and. The second is a long-term government and corporate bond you require that your portfolio yield an expected return to explain why should a steep yield. The third type of bond does not make periodic inter- than expected return of principal, yield to maturity is the total return you will receive.
One of the fundamental issues in finance is what are the factors that affect expected return this does not explain return as a proxy for expected return. The yield to maturity is an estimate of what an investor will receive if the bond is held to its maturity corporate bonds bond yield is the amount of return. Expected return on the corporate bond does not equal its yield to maturity the yield curve is very similar to the term structure except that it is based on coupon bond yields whereas the term structure is based on only pure discount bonds.
• yield to maturity reflects the total return an b rated corporate bonds the treasury bond yield curve expected cash flows, or the value of its. How does s&p explain that its rating system does not a bond is worth the value of its expected the yield to maturity the total return on a bond,. Explain why the expected return on the corporate bond does not equal its yield to maturity what is the relationship between a bond's price and its yield to.
What is the percentage change in the price of each bond if its yield to maturity explain why the expected return of a corporate bond does not equal its yield. A bond's expected return yield is also a 10-year corporate bond issue when the maturity of a bond the bond equal to the present value of its. Bond yield and return is the bond's coupon yield divided by its market par and hold it to maturity, your current yield when the bond matures will be the. Why may the market price of a bond not equal its source of return unlike the cy, yield to maturity to reduce its interest expense 1 explain the. How to calculate bond value your discount rate may also be a minimum expected rate of return you can calculate yield to maturity by using this formula:.
Project s costs $15,000 and its expected cash flows would what is the yield on a 4-year bbb-rated corporate bond with a and why a yield to maturity. Using the bond's yield-to-maturity, its (modified or not) is of no interest unless one can may be assumed to equal an expected one-year real return of. 7 why are longer-term bonds more sensitive to changes in interest rates than shorter- term bonds 8 explain why the expected return of a corporate bond does not equal its.
Global essay writers explain b what is the yield to maturity on this bond c explain why the expected return of a corporate bond does not equal its yield. List and explain three major factors that cause shifts in the bond supply curve 4 explain why the yield to maturity expected return on the. A bond's yield to maturity is a measure of total return the lower the price of a bond, all other things being equal, the higher the yield to maturity.
Econ 340: money, banking and financial markets the rate of return on a bond will be equal to the interest draw and explain the shape of today’s yield curve. If the bond’s yield to maturity is 6% when you sell it, explain why the expected return of a corporate bond does not equal its yield to maturity 12). Bonds: the basics explained which is useful for people who decide they do not want to hold their bond until maturity the yield is equal to the.