coupon-rate
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Which bond should I pick if both have the same YTM, tenor, credit risk? One has a higher coupon rate than the other.
Suppose I am presented 2 bonds YTM Coupon A 5% 6% B 5% 4% Given that both bonds have the same YTM, tenor, credit risk would either bond be better than another? A couple of things come to mind. In particular that the Macaulay duration (how fast an investor gets their money back) of...- Ixeua
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- bonds coupon-rate macaulay-duration ytm
- Replies: 9
- Forum: Fixed Income (P1.T4 or P2.T5)
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P1.T4.907. The coupon effect and carry roll-down scenarios (Tuckman Ch.3)
Learning objectives: Define the coupon effect and explain the relationship between coupon rate, YTM, and bond prices. Explain the decomposition of P&L for a bond into separate factors including carry roll-down, rate change, and spread change effects. Identify the most common assumptions in carry...- Nicole Seaman
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- bond-prices carry-roll-down coupon-effect coupon-rate rate-change realized-forwards spread-change unchanged-term-structure unchanged-yields yield-to-maturity
- Replies: 0
- Forum: FRM® Practice Questions