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Yankee market
The foreign market
in the United States.
Yield
The percentage rate of return
paid on a stock in the form of dividends, or the rate of interest
paid on a bond
or note.
Yield curve
The graphical depiction of the relationship between the yield
on bonds of the same credit quality but different maturities. Related:
Term structure of interest
rates
Yield curve option-pricing models
Models that can incorporate different volatility
assumptions along the yield
curve, such as the Black-Derman-Toy model. Also called arbitrage-free option-pricing models.
Yield curve strategies
Positioning a portfolio
to capitalize on expected changes in the shape of the Treasury yield curve
.
Yield ratio
The quotient of two bond
yields.
Yield spread strategies
Strategies that involve positioning a portfolio
to capitalize on expected changes in yield
spreads between sectors of the bond
market.
Yield to call
The percentage rate of a bond
or note, if you were to buy and hold the security
until the call
date. This yield
is valid only if the security is called prior to maturity. Generally bonds are callable over several years and normally are called at a slight premium
. The calculation of yield to call
is based on the coupon
rate, length of time to the call and the market price.
Yield to maturity
The percentage rate of return
paid on a bond, note or other fixed income security
if you buy and hold it to its maturity date
. The calculation for YTM is based on the coupon
rate, length of time to maturity and market price. It assumes that coupon interest
paid over the life of the bond
will be reinvested at the same rate.
Yield to worst
The bond
yield
computed by using the lower of either the yield to maturity
or the yield to call
on every possible call date.
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