How do I use the holding period return yield to evaluate my bond portfolio?

July 7, 2024 No Comments

A: The holding period return yield formula can be used to compare the yields of different bonds in your portfolio over a given period. This method of yield comparison enables investors to determine which bonds are generating the largest profit. In addition, this formula can

How are Treasury bill interest rates determined?

July 7, 2024 No Comments

A: U.S. Treasury bills (T-bills) are typically sold at a discount from their par value. The level of discount is determined during Treasury auctions. Unlike other U.S. Treasury securities such as Treasury notes (T-notes) and Treasury bonds (T-bonds), T-bills do not pay periodic interest at

How are treasury bills (T-bills) taxed?

July 7, 2024 No Comments

A: Interest earned on all U.S. Treasury securities, including treasury bills, is exempt from taxation at the state and local level but is fully taxable at the federal level. At the end of each year, owners of treasury bills should be sent a 1099-INT form

How can bond yield influence the stock market?

July 7, 2024 No Comments

A: Bond yields influence the stock market in different ways at different times. Investors and traders need to be aware of economic and market conditions to understand the constantly evolving relationship between bond yields and the stock market. Changes in the Economy When the economy

How can I calculate convexity in Excel?

July 7, 2024 No Comments

A: In the bond market, convexity refers to the relationship between price and yield; when graphed, this relationship in non-linear and forms a long-sloping U-shaped curve. A bond with a high degree of convexity will experience relatively dramatic fluctuations when interest rates move. There is

How can I calculate the carrying value of a bond?

July 7, 2024 No Comments

A: The carrying value of a bond is the net amount between the bond’s face value and any un-amortized premiums or minus any amortized discounts. The carrying value is also commonly referred to as the carrying amount or the book value of the bond. Because

How Can I Check If an Old Railroad Bond Has Value?

July 7, 2024 No Comments

A: Finding out whether an old railroad bond from 1938 still has any value is a tough question to answer. The short answer is that it will require a person to do some homework or spend money on a search service. Getting Started With Your Research The first step

How can I create a yield curve in Excel?

July 7, 2024 No Comments

A: You can create a yield curve in Microsoft Excel if you are given the time to maturities of bonds and their respective yields to maturity. The yield curve depicts the term structures of interest rates for bonds and the term structures could be normal,

How Central Banks Influence Money Supply

July 7, 2024 No Comments

A: Central banks use several different methods to increase (or decrease) the amount of money in the banking system. These actions are referred to as monetary policy. While the Federal Reserve Board (the Fed) could print paper currency at its discretion in an effort to

How do hurdle rate MARR and internal rate of return IRR relate?

July 7, 2024 No Comments

A: In capital budgeting, projects are often evaluated by comparing the internal rate of return (IRR) on a project to the hurdle rate, or minimum acceptable rate of return (MARR). Under this approach, if the IRR is equal to or greater than the hurdle rate, the

All Rights Reserved