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V.17:6 (281-283): Yield Spread Tunnels by Lorne W. Rae

V.17:6 (281-283): Yield Spread Tunnels by Lorne W. Rae

Regular price $2.95 USD
Regular price Sale price $2.95 USD
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Yield Spread Tunnels Fixed income investors have an array of instruments in which to invest. They can choose from an assortment of maturities as well as credit quality. Heres a simple technique with which to identify opportunities in the fixed-income market.

One common technique for assisting fixed-income investors and traders in their decision making is the analysis of yield spreads. A yield spread is the difference in yield to maturity (or that discount rate which equates the present value of a bond to its market value) between two bonds. The spread is expressed in terms of basis points (each 1 /100 of 1%), and yield spreads occur because bonds vary in maturity, in coupon, in marketability, and in quality.
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