Not exact matches
Long
bonds will end up being a very volatile investment
at some point once
rates or inflation rise from
current levels, but intermediate - term
bonds should continue to dampen stock
market volatility.
When
bond yields change in the
market, the YTM on a fund also changes, and future
bonds acquired by a fund will then be acquired
at current YTM
rates.
A
bond is considered a discount
bond when it has a lower interest
rate than the
current market rate and, consequently, is sold
at a lower price.
At the time of issue of the
bond, the interest
rate and other conditions of the
bond will have been influenced by a variety of factors, such as
current market interest
rates, the length of the term and the creditworthiness of the issuer.
They trade in the
bond market at prices reflecting
current interest
rates.
Yield to maturity is a
bond's expected internal
rate of return, assuming it will be held to maturity, that is, the discount
rate which equates all remaining cash flows to the investor (all remaining coupons and repayment of the par value
at maturity) with the
current market price.