Bond yield is the return you will receive if
you hold the bond till maturity.
Someone who bought shorter duration bonds like 1 year or 5 years government bonds is not suffering capital losses when interest rates rise, just as long he can
hold the bonds till maturity.
This risk can be reduced by having bonds of different maturities (diversifying with short - term, medium - term, and long - term bonds) or by
holding a bond till maturity.
The key to get the most out of bonds is to
hold the bonds till maturity.
Not exact matches
Most of the time we view
bonds as something that is bought and
held till maturity.
Based on the premiums to
hold CDS, and the costs to
hold bonds on margin (assuming
till maturity, any time frame), are CDS an adequate low cost hedge?