Treasury bills (T-bills) are a type of short-term debt instrument issued by the U.S. government with maturities ranging from a few days to 52 weeks. T-bills are sold in denominations of $1,000, $5,000, $10,000, and $100,000. T-bills are sold at a discount from par, which is the face value of the bill. The difference between … Read more
A samurai bond is a Japanese yen-denominated bond issued in Tokyo by a non-Japanese company. Samurai bonds are governed by Japanese law and are subject to Japanese taxation. The issuer of a samurai bond is typically a foreign company looking to raise capital in the Japanese market. Samurai bonds were first introduced in 1961. The … Read more
An international bond is a debt security that is issued by a company or other entity based in one country and sold to investors in another country. The terms and conditions of international bonds are typically governed by the laws of the issuer’s country, and the bonds are typically denominated in the currency of the … Read more
The price value of a basis point (PVBP) is a measure of the price change of a financial instrument resulting from a one-basis point (0.01%) change in interest rates. It is used to compare the price sensitivity of different financial instruments to changes in interest rates. For example, if the PVBP of a security is … Read more
. What are Yields in Finance? Yields in finance are defined as the percentage return on an investment over a specific period of time. There are different types of yields, which are based on different factors such as the type of investment, the length of time the investment is held, and the current market conditions. … Read more
The clean price is the price of a bond that excludes the interest that has accrued since the last coupon payment. This is in contrast to the dirty price, which includes the accrued interest. The clean price is also sometimes referred to as the “flat price.” What is a clean up bond? A clean-up bond … Read more
Types of Fixed Income Investments and How to Invest in Them Which bond investment is safest? Bonds are often considered to be one of the safest investment options available, as they tend to be less volatile than stocks and offer a fixed rate of return. However, there are different types of bonds with varying levels … Read more
A roll-down return is the periodic return on a bond that is rolled over at a higher price. The higher price results in a higher yield to maturity, which is the return that is typically used to compare different bonds. What is a carry trade in fixed income? A carry trade in fixed income is … Read more
When a bond is said to be “pulling to par,” it means that the bond’s price is rising in relation to its face value. In other words, the bond is becoming more valuable as it approaches maturity. This is typically seen as a good sign for investors, as it means that the bond is likely … Read more
A high-yield bond spread is the difference in yield between a high-yield bond and a comparable treasury bond. The high-yield bond spread is used to measure the risk of investing in high-yield bonds. A higher spread indicates a higher risk. How are high yield bonds priced? High yield bonds are typically priced using a spread … Read more
