Sentences with phrase «between bond prices»

Study participants were asked five questions covering aspects of economics and finance encountered in everyday life, such as compound interest, inflation, principles relating to risk and diversification, the relationship between bond prices and interest rates, and the impact that a shorter term can have on total interest payments over the life of a mortgage.

Returns are primarily dependent on the change in interest rates as there is an inverse relationship between bond prices and interest rates.

Concerns about the divorce between bond prices and economic reality no doubt help explain the gyrations in European bond yields.

I'd bet that two - thirds of bond mutual fund shareholders don't even know the relationship between bond prices and interest rates.

Yet, we do not have to start simply guessing random numbers if we stop for a moment to consider the relationship between bond price and yield.

The graph that shows the relationship between bond price and yield will be convex.

Not exact matches

U.S. government bonds serve as a benchmark against which other bonds are priced — especially the Canadian variety, given the close ties between the two economies.

Treasury yields pull back sharply Thursday after the reemergence of trade tensions between global powerhouses rattles investors, pushing stocks down and bond prices up

The difference between the issue price and the face value is treated as tax - exempt income rather than as capital gains if the bonds are held to maturity.

In these cases, the difference between the bond's issue price (the discounted rate) and its face value would be considered tax - exempt income rather than capital gains.

«Between 2 % and 5 % for stocks, bonds and commodities are expected long term returns for global financial markets that have been pushed to the zero bound, a world where substantial real price appreciation is getting close to mathematically improbable.

Spreads (the difference in price between the bid and offer) are among the most narrow available in the bond market.

These securities are known as Original Issue Discount (OID) bonds, since the difference between the discounted price at issuance and the face value at maturity represents the total interest paid in one lump sum.

Treasury bond prices rallied and yields on the 10 - year fell to between 2.8 % and 2.85 % following the release of benign inflation data and weaker - than - expected retail sales figures.

A repo is a contract between two counterparties where one agrees to sell a bond to the other and repurchase it at a specified price at some date in the future.

In general, they may seek to take advantage of market inefficiencies such as pricing differences and relative discrepancies between securities such as stocks and bonds, technical market movements, deep fundamental valuation analysis, and other quantifiable trends and / or inconsistencies.

There is currently no clear difference in pricing between green and non-green bonds from the same issuer with the same maturity.

Generally, the higher the duration, the more the price of the bond (or the value of the portfolio) will fall as rates rise because of the inverse relationship between bond yield and price.

Higher transaction costs Due to a typically large spread between bid and offer prices, and higher transaction costs associated with less liquid securities, trading high yield bonds can be costly.

We can also see the impact of this return to focus on fundamentals in the relationship between bond market expectations for the Fed and its impact on the pricing of gold.

A strong association between cortisol levels and price volatility as indicated by bond futures has previously been reported in financial traders27.

The study compared online bond prices for over 20,000 municipal and corporate inventory matches between September 2nd and October 6th, 2015.

The left - hand panel charts the gap between market - maker buying and selling prices for sovereign bonds denominated in US dollars and euros, respectively.

These performance numbers don't account for inflation — which can be an important consideration when evaluating investment performance, but they do illustrate the different magnitudes of price swings between stocks and bonds.

the difference between the stated redemption price at maturity (if greater than one year) and the issue price of a fixed income security attributable to the selected tax year; NOTE: Tax reporting of OID obligations is complex; if acquisition or bond premium is paid during the purchase, or if the obligation is a stripped bond or stripped coupon, the investor must compute the proper amount of OID; refer to IRS Publication 1212, List of Original Issue Discount Instruments, to calculate the correct OID

, Claude Erb and Campbell Harvey re-examine the relationship between gold price and interest rates as proxied by U.S. government bond prices.

For example, Overseas Shipholding Group (equity ticker OSG) is a deeply junk rated oil tanker company that has seen its bonds drop from trading around par (par means 100 cents on the dollar when comparing the market price to the face amount of the bonds) to distressed levels between 60 and 70 cents on the dollar.

In contrast, medium - term inflation expectations implied by financial market prices, which are calculated as the difference between nominal and indexed bond yields, have been broadly stable at around 2.6 per cent over the past nine months.

The market for bonds is very large and prices reflect the trade - off between rates, credit quality and bond maturity.

The only thing that seems changed is liquidity.There's much more of it, and that goes to the difference between stock and bond prices.

However, in the short term bonds are likely to benefit from lower CPI inflation rates as my leading indicator, the absolute change in oil prices from a year ago, is pointing to the U.S. CPI ex shelter declining to between 2 and 2.5 % in February / March.

As always, some of the most important market information can be found in price divergences between asset classes such as stocks and bonds.

This, along with ensuring a fair market price, creates bonds between growers and buyers that can help reduce incentives to cheat.

However, Japan also embarked on a process of quantitative easing between 2001 and 2006 similar to that of the UK, buying up government bonds when rock bottom interest rates failed to stimulate the economy, and the process was judged to be less than successful with Japan still facing problems of low growth and falling prices.

Click or tap on a number in the gray bar at the bottom of the illustration to see the typical relationship between the average maturity of a bond fund's holdings and its income and share - price variability in a period of changing interest rates.

Also, the further a bond is from its maturity date, the larger the difference between its purchase price and its redemption value, which is also referred to as its principal, par or face value.

With short - term bond fund rates between 0.5 % and 2 %, and intermediate - term bond fund rates between 1.5 % and 3.3 %, there is plenty of downside risk due to the potential for higher future interest rates (bond prices fall when interest rates rise), and not much upside potential due to the current low rates.

Because the amount of market discount, two points, is less than the de minimis amount (which in this case is 2.5 points, or 0.25 percent of the face value of a bond times the number of years between the bond's acquisition and its maturity), the market discount is considered to be zero and the difference between purchase price and sales price or redemption is generally treated as a capital gain upon disposition or redemption.

An easy way to grasp why bond prices move in the opposite direction as interest rates is to consider zero - coupon bonds, which don't pay coupons but derive their value from the difference between the purchase price and the par value paid at maturity.

If a tax - exempt bond is originally issued at a price less than par (as distinguished from a subsequent sale of a previously - issued bond), the difference between the issue price of such bond and the amount payable at the maturity of the bond is considered «original issue discount» (OID).

Arbitrage might take advantage of imbalances in prices between two markets for the same security (such as a domestic and a foreign market) or between two types of securities whose value depends on the same underlying security (such a stock and a bond convertible into the stock).

That's because the difference between your purchase price and the bond's face value is amortized over the life of the bond and taxed annually as though it were interest.

Also, the relationship between interest rates, inflation, and bond prices is complex, and can be affected by factors other than the ones outlined here.

Both bond prices and yields go up and down, but there's an important rule to remember about the relationship between the two: They move in opposite directions, much like a seesaw.

If you keep your portfolio divided between stocks and bonds, the decline in stock prices will have reduced the percentage of your portfolio devoted to stocks.

The inverse relationship between interest rates and bond prices means that — as interest rates fall, bond prices rise.

The difference between the sale price of an asset (such as a mutual fund, stock, or bond) and the original cost of the asset.

Rather, the dealers earn revenue by means of the spread, or difference, between the price at which the dealer buys a bond from one investor — the «bid» price — and the price at which he or she sells the same bond to another investor — the «ask» or «offer» price.

The OID is the difference between the price a bond is sold at and the bond's actual face value, also known as par.

Couple that with the traditional relationship between inflation expectations and bond prices having broken down in Canada as US investors have been increasingly turning to buy foreign bonds, and there really isn't anywhere to invest that makes sense right now, except perhaps in nontraditional assets.