coupon-rate

  1. I

    Which bond should I pick if both have the same YTM, tenor, credit risk? One has a higher coupon rate than the other.

    Suppose I am presented 2 bonds YTM Coupon A 5% 6% B 5% 4% Given that both bonds have the same YTM, tenor, credit risk would either bond be better than another? A couple of things come to mind. In particular that the Macaulay duration (how fast an investor gets their money back) of...
  2. Nicole Seaman

    P1.T4.907. The coupon effect and carry roll-down scenarios (Tuckman Ch.3)

    Learning objectives: Define the coupon effect and explain the relationship between coupon rate, YTM, and bond prices. Explain the decomposition of P&L for a bond into separate factors including carry roll-down, rate change, and spread change effects. Identify the most common assumptions in carry...
    • Nicole Seaman
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    • bond-prices carry-roll-down coupon-effect coupon-rate rate-change realized-forwards spread-change unchanged-term-structure unchanged-yields yield-to-maturity
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    • Forum: FRM® Practice Questions
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