The reason for having negative yield to maturity, and the possibility of buying a negative yield bond Introduction: A bond refers to the debt securities issued by the governments or corporations for raising capital. The borrower does not return the face value until maturity. However, the investor receives the coupons every year until the date of maturity.

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Chapter 7, Problem 36QP

Summary Introduction

To determine: The reason for having negative yield to maturity, and the possibility of buying a negative yield bond

Introduction:

A bond refers to the debt securities issued by the governments or corporations for raising capital. The borrower does not return the face value until maturity. However, the investor receives the coupons every year until the date of maturity.

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