Explain with example the Yield to Maturity?

Q: Distinguish the nominal rate of return from the real rate of return.

A:

Q: Explain the differences between yield-to-maturity and yield-to-call

A: While both yield to maturity and yield to call are related to bonds they are not the same thing.

Q: Define yield curve

A: Yield is the percentage of securities at which the return is provided by the company to its…

Q: How can we find Yield to maturity?

A: Yield to maturity (YTM) is the foreseen absolute profit for a bond if the bond holds until due or…

Q: A special case of the Internal Rate of Return (IRR) is the Yield to Maturity (YTM). Explain how the…

A: A yield curve plots the yield, or interest rates, of bonds with comparable credit grade but various…

Q: Explain the effect of issuance cost on firm value.

A: There are issues cost associated with debt and equity that has impact on  value of firm.

Q: Factors that Affect Yield to Maturity

A: A bond's yield to maturity depends basically on its present value, coupon rate and the time to…

Q: Example or scenario of market portfolio?

A: The question is based on the concept of market portfolio, which  is a bundle of  all the assets…

Q: Define required rate of return on a portfolio

A: Introduction: Required rate of return is nothing but the minimum rate that an investor would…

Q: How do maturity risk premiums affect the yield curve?

A: A premium, which a borrower pays to the lender in the form of compensation of interest rate…

Q: Define expected rate of return on a portfolio

A: Expected Return: The expected return is the minimum required rate of return which an investor…

Q: Present and Explain the theories of the Yield Curve?

A: The yield curve is a curve that shows the relationship between the interest rates and the different…

Q: Define volatility value.

A: Volatility is a rate at which the cost of a security increments or diminishes for a specified set of…

Q: Explain how a yield curve is constructed and what its shape reveals about interest rates.

A: The yield curve is referred to as the "lie," which is used to plot the yields of bonds that used to…

Q: Whatis a yield curve?

A: It is the percentage of the securities at which the return is provided by the company to its…

Q: How to calculate yield to maturity

A: Yield to Maturity: The yield to maturity (YTM) of a bond is the cumulative return expected if the…

Q: What is normal yield curve?

A: The yield curve is a curve that shows the many yields to maturity and interest rates. The curve also…

Q: define volatility

A: Volatility is a rate at which the cost of a security increments or diminishes for a specified set of…

Q: What is a yield curve? What does it mean when the yield curve is inverted?

A: Yield curve tells the relationship between the short term interest rates and long term interest…

Q: Define Expected return on a portfolio

A: The expected return is the profit or loss an investor anticipates on an investment that has known or…

Q: Explain portfolio weight

A: SOLUTION:- Portfolio is a group of financial assets or investments, such as stocks, bonds, and cash.…

Q: Calculate and label the market risk premium

A: Security Market Line or SML is the upward sloping straight line. This line is the graphical…

Q: Explain risk-free nominal rate of interest rate

A: This is the raw rate of return which does not take inflation into consideration. This is the rate…

Q: Distinguish between the initial rate of interest and the expected yield on an ARM. What is the…

A: Introduction: The adjustable rate mortgage is one of the method used to calculate the interest rate…

Q: Explain how a yield curve is constructed.

A: Yield curve is referred to as the line, which used to plot yields that are interest rates of the…

Q: A) What was your expected yield to maturity? B) What was your actual rate of return?

A: The yield to maturity (YTM) is the annual percentage rate of return on a bond if the investor…

Q: Explain Comparing Risk Premiums?

A: Risk premium is additional premium an investor achieves by investing in a riskier financial…

Q: Define yield.

A: Yield can be considered as a metric for cash flow for the investor on the amount with which a…

Q: Explain held-to-maturity investment.

A: Investment: It refers to the process of using the currently held excess cash to earn profitable…

Q: Define yield to maturity (YTM)

A: Bond is a financial instrument. Issuer issues bond to raise the fund and payback the amount at the…

Q: Explain Financial Leverage?

A: Companies going for purchase of assets have three options for financing. They are equity, debt &…

Q: How do you calculate yield to maturity?

A: The yield to maturity is nothing but the interest rate of a bond. It can also be termed as the…

Q: /hy is yield to maturity more important than coupon rate when nmes to honds?

A: In bonds there are coupon payments paid each year and par value on the maturity of the bond.

Q: Explain the difference between the yield to maturity and the yieldto call.

A: Bonds are the fixed income securities issued by the government or companies to raise funds from the…

Q: distinquish between current yield, coupon rate and yield to maturity

A: current yield is the yield of the bond at present moment.

Q: praş Calculate their yield to maturity.

A: Note : As per the guidelines, only first question will be answered. Kindly post the remaining parts…

Q: What is the term for the type of interest rates that constitute the yield curve? What do these…

A: Type of interest rates - The nominal interest rate, the effective rate, and the real interest rate…

Q: What is maturity risk premium (MRP)?

A: normally Maturity risk premium is the extra return that an investor will get for bearing the…

Q: Use the ‘Liquidity Premium Theory’ to explain the shape of the yield curve.

A: Liquidity Premium Theory states that investors will require a higher rate of return(interest rate or…

Q: Explain an upward sloping yield curve using the pure expectation theory.

A: Pure expectation theory: Pure expectation theory states that expected future spot rates will be…

Q: How is a future worth yield?

A: Future worth yield is equals to future return on a particular amount. Future value is the value of…

Q: What is the difference between yield to maturity and current yield? Explain

A: Bond is a debt instrument issued by companies and government. It is a fixed income instrument which…

Q: Plot the relation between duration and coupon rate

A: Longer-duration bonds have a greater period and are also exposed to a greater probability that…

Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.