What’s the logic behind the bond-yield-plus-risk-premium approach?

Q: bond

A: Convexity can be defined as a measure which explains the relationship between price & yield of…

Q: What are some of the specific bond terms to understand the yield to maturity?

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

Q: What is the cost of equity based on the own-bondyield-plus-judgmental-risk-premium method?

A: Answer: Bond-yield-plus-judgemental-risk-premium method involves adding a judgemental risk premium…

Q: How would bond convexity be used as a risk-management tool in managing a bond portfolio?

A: Bond Convexity is a measure of the curvature or the degree of the curve in the relationship between…

Q: risk and what is the relation between interest rate risk and callable bonds. Explain with the help…

A: Interest rate risk : In simple words, Interest rate risk refers to the possibility of investment…

Q: What is the relationship between interest rates and bond valuations? What are the fundamental…

A: A bond is borrowing security issued by the company to raise funds from the market by making an…

Q: ole do bond length and bond convexity play in determining the interest rate risk of

A: In the bond portfolio interest is one of the major factor affecting on the bond.

Q: Is Treasury Bond Yield, the risk free rate?   Yes or No. Explain.

A: Introduction: Risk free rate is nothing but an investment’s return rate with no chance of loss. The…

Q: What is interest rate risk, and how does it relate to callable bonds? Explain using an example of…

A: This question discusses callable bonds.

Q: Discuss the problems with the traditional bond pricing approach by using the yield to maturity?

A: Bond valuation is the method of finding the fair value of the bond. The fair value means the…

Q: a) What is the similarity between the internal rate of return of a project and the yield-to-maturity…

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

Q: What exactly is a bond's "call" feature? What impact does the call feature have on bond premium or…

A: This question explains about a bond's "call" feature the call feature have on bond premium or…

Q: Is the risk-free rate the Treasury Bond Yield

A: Introduction: A risk-free rate is the rate of return on an investment with no risk of loss. The…

Q: approximate yield to maturity for this bond?

A: 10s20 means: Coupon rate is 10% and 2020 is year of maturity.   So when we deduct 2020 from 2016, n…

Q: a) What is the similarity between the internal rate of retum of a project and the yield-to-maturity…

A: An investor make investments in securities and bonds with a purpose of earn long term return. When…

Q: what is the current yield of the bond?

A: Current Yield of Bond: it is can be said as the yield obtained by a bond on current price or how…

Q: What impact do interest rates have on bond prices? What are the key assumptions that go into…

A: The answer are as follows

Q: What are the risks associated with bond investing? How can each risk category be quantified and…

A: This question explains about bond investing's hazards, as well as the risk category, must be…

Q: What is return formula for bond?

A: Solution-      Bonds-                  A bond is a fixed financial gain instrument that represents a…

Q: Identify and discuss the relations among a bond’s coupon rate, the yield required by the market, and…

A: Bond prices are the price that we see trading in the market. these prices can be calculated by…

Q: What is the difference between the yield to maturity of a bond and the realized yield?

A: Introduction: Depending upon the market conditions, yield at maturity is the market return expected…

Q: Explain why are the bond prices for A and B different or the same? Explain your answer clearly.

A: Price of a bond is the sum of the present value of all the coupon bonds made and the face value at…

Q: What variables influence bond market rates

A: This question deals with the variables influence bond market rates

Q: What is a clean and dirty price of a bond?

A: SOLUTION:- The clean price of a bond refers to the price which does not includes accrued interest.…

Q: Explain the principle of immunization when used with a bond portfolio. What is bond portfolio…

A: Hey, since there are multiple subparts questions posted, we will answer first three question. If you…

Q: Explain the reasoning behind the bond-yield-plus-judgmental-riskpremium approach.

A: Approach under which judgmental risk premium is added into a yield on an entity that is owning the…

Q: What is the relationship between bond price and yield. Explain with an example and graphical…

A: A bond is a kind of debt financial instrument that is being issued by corporations and the…

Q: What happens when the bond's market rate is greater than the stated rate?

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: Which type of bonds offer a higher yield?

A: Bonds are fixed-income instruments representing a loan made by an investor to the government or…

Q: How does a bond’s current yield differ from its total return?

A: A bond is a debt financial instrument issued by governments or corporations to raise capital from…

Q: What is equity risk premium?

A: The risk premium is the extra return an investor receives for taking market risk. We know that risk…

Q: What is the importance of Bond

A: Bond market is place there is buying and selling of bonds happen and bonds are traded in the market.

Q: Explain how these bond risk components (Coupons, face value, price of the bond, ytm, time till…

A: Immunization of bond is the plan of action to match the time horizon of the investor with the time…