Sentences with phrase «bond buyers return»

Not exact matches

There is no share holder buyer of last resort, and so equity buyers can demand a higher return than bond holders.

Buyers of Treasury bonds typically expect to receive a return on their capital in excess of inflation.

The higher risk bonds, in order to attract lenders (buyers), pay a higher return but are less reliable.

These buyers are large investors — central banks, insurance companies, commercial banks and even index funds — that supposedly do not care about returns, and will pay any price when transacting bonds.

The unit, the chief investment office (CIO), has been the biggest buyer of European mortgage - backed bonds and other complex debt securities such as collateralized loan obligations in all markets for more than three years... The unit made a deliberate move out of safer assets such as US Treasuries in 2009 in an effort to increase returns and diversify investments.»

Term premium refers to the extra return a buyer of bonds demands to hold a longer - term security instead of investing in a series of short - term issues.

These buyers are large investors — central banks, insurance companies, commercial banks and even index funds — that supposedly do not care about returns, and will pay any price when transacting bonds.

A single bond's maturity date represents the date that the company, municipality, or government that sold the bond (the «issuer») agrees to return the principle — or face value — to the buyer.

The higher risk bonds, in order to attract lenders (buyers), pay a higher return but are less reliable.

At the end of that period, the bond reaches maturity and the full amount of the buyer's original investment, or the principal, is returned.

If bond yields drop from 6 % to 5 %, bond buyers immediately grasp that their nominal return will be lower.

So you can see that high inflation (or even the fear of high inflation) causes bond buyers to demand a higher return on their money to protect their purchasing power.

Usually on a fixed - coupon bond (e.g. Government bond) the interest rate is fixed for a given period (say 10 years), and if market rates rise the face value of the bond falls, to compensate for the lower return a new buyer would get, compared to the market interest rate.

E.g. buyers of US T - Bonds in 1962 realized 5 - yr, 10 - yr, and 20 - yr returns that were lower than inflation - negative real returns.

For example, the table below shows three different bonds, all maturing in two years and all of which give the buyer a return of 4 % if purchased at their net present value price:

At the time of purchase, the buyer must recognize whether the bond is subject to de minimis because the after - tax return could be substantially less than expected.

For example, periods with high unanticipated inflation would see poor bond returns, since bond prices would have to drop in order for bond buyers to receive a rate of return that was higher than inflation.

The welcome effect is that people took it as a matter of course that stocks were real businesses bought for ownership, although stock buyers had the reputation of being slick and wily because their ownership positions were based on the current and future profitability of companies rather than secured bonds which had been the hallmark of traditional conservative investing accounts because property could be sold to return part of your principal in the event that the business failed.

Investors holding auction - rate bonds issued by municipalities, schools and others will have to wait for «natural buyers» to return to the market before auctions return to normal, Mr. Hoekstra said.

The returning or receiving portions of the bond premium reduce the account balance of the premium on the bond payable for the bond seller or the account balance of the premium on the bond investment for the bond buyer.

Bond premium amortization for each coupon payment period illustrates how the actual cash coupon payment effectively pays interest expense and returns a portion of the bond premium for the bond seller or earns interest income and receives a portion of the bond premium for the bond buBond premium amortization for each coupon payment period illustrates how the actual cash coupon payment effectively pays interest expense and returns a portion of the bond premium for the bond seller or earns interest income and receives a portion of the bond premium for the bond bubond premium for the bond seller or earns interest income and receives a portion of the bond premium for the bond bubond seller or earns interest income and receives a portion of the bond premium for the bond bubond premium for the bond bubond buyer.