Definition Current yield (CY) is the expected rate of return based on an annual coupon payment and current market price of a bond. Thus, it does not account for all cash flows if an investor… Read more
Definition A callable bond is a simple financial instrument that can be redeemed by the issuer before the maturity date. The call price is usually higher than the par value, but the call price decreases… Read more
Definition The yield to maturity (YTM) of a bond is the internal rate of return (IRR) if the bond is held until the maturity date. In other words, YTM can be defined as the discount… Read more
Definition Bond valuation is a process of calculating its fair price. Both investors and issuers use many different techniques, but most of them are based on one fundamental principle—that the fair price of a bond… Read more