A change in yield-to-maturity will cause a change in bond price. What is the source of the change in the yield-to-maturity?
The yield-to-maturity on a corporate bond has two components:
Regardless of the source of the yield-to-maturity change, the bond price change caused by a change in the yield-to-maturity will be the same.
In practice, there is often interaction between changes in benchmark yields and in the spread over the benchmark.
|Luminos: I think breaking the LOS into segments this way makes debt instruments much easier to study|
|cong: Flight to quality means that investors would be more interseted in low-return low-risk investments in times of turbulence.|
|2014: This chapter here in analyst notes is explained in good way|
|johntan1979: I totally agree... from dentures to stripping to spreading... Analyst Notes rocks!|
| gill15: Im getting way to tired....all I read was stripping to spreading and something rocks....|
time to hit the club...
|enetis: im with you gill|
|farhan92: now this makes sense !|
|fobucina: gill that was the best comment i've read so far|