Convenience yield means benefit of using the thing which is required at the time of need/escalation. It cannot be measured directly. Eg., if we need raw material for production, we can either buy it or go long forwards. But if we buy forwards then we can't use the raw materials at the time of requirRead more
Convenience yield means benefit of using the thing which is required at the time of need/escalation. It cannot be measured directly. Eg., if we need raw material for production, we can either buy it or go long forwards. But if we buy forwards then we can’t use the raw materials at the time of requirement in production(Not physically available). There is a convivence of having physical inventory. So it is a non-monetary benefit as it an indirect benefit and reduces the cost of forwards.
Convenience yield means benefit of using the thing which is required at the time of need/escalation. It cannot be measured directly. Eg., if we need raw material for production, we can either buy it or go long forwards. But if we buy forwards then we can't use the raw materials at the time of requirRead more
Convenience yield means benefit of using the thing which is required at the time of need/escalation. It cannot be measured directly. Eg., if we need raw material for production, we can either buy it or go long forwards. But if we buy forwards then we can’t use the raw materials at the time of requirement in production(Not physically available). There is a convivence of having physical inventory. So it is a non-monetary benefit as it an indirect benefit and reduces the cost of forwards.
E(R) formula = periodic spread - (spread duration*change in spread) - (periodic PD*LGD) Yes if interest rates increase then price should fall so that is why so we are deducting 2nd part of the formula (bold part). if you calculate E(R) by above formula then Correct option is Option A as it is havingRead more
E(R) formula = periodic spread – (spread duration*change in spread) – (periodic PD*LGD)
Yes if interest rates increase then price should fall so that is why so we are deducting 2nd part of the formula (bold part).
if you calculate E(R) by above formula then Correct option is Option A as it is having positive E(R) as compared to other bonds.
Riding the yield curve
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See lessDerivatives convenience yield
Convenience yield means benefit of using the thing which is required at the time of need/escalation. It cannot be measured directly. Eg., if we need raw material for production, we can either buy it or go long forwards. But if we buy forwards then we can't use the raw materials at the time of requirRead more
Convenience yield means benefit of using the thing which is required at the time of need/escalation. It cannot be measured directly. Eg., if we need raw material for production, we can either buy it or go long forwards. But if we buy forwards then we can’t use the raw materials at the time of requirement in production(Not physically available). There is a convivence of having physical inventory. So it is a non-monetary benefit as it an indirect benefit and reduces the cost of forwards.
Hope this helps!
See lessDerivatives convenience yield
Convenience yield means benefit of using the thing which is required at the time of need/escalation. It cannot be measured directly. Eg., if we need raw material for production, we can either buy it or go long forwards. But if we buy forwards then we can't use the raw materials at the time of requirRead more
Convenience yield means benefit of using the thing which is required at the time of need/escalation. It cannot be measured directly. Eg., if we need raw material for production, we can either buy it or go long forwards. But if we buy forwards then we can’t use the raw materials at the time of requirement in production(Not physically available). There is a convivence of having physical inventory. So it is a non-monetary benefit as it an indirect benefit and reduces the cost of forwards.
Hope this helps!
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Option B?
Option B?
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Option B?
Option B?
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E(R) formula = periodic spread - (spread duration*change in spread) - (periodic PD*LGD) Yes if interest rates increase then price should fall so that is why so we are deducting 2nd part of the formula (bold part). if you calculate E(R) by above formula then Correct option is Option A as it is havingRead more
E(R) formula = periodic spread – (spread duration*change in spread) – (periodic PD*LGD)
Yes if interest rates increase then price should fall so that is why so we are deducting 2nd part of the formula (bold part).
if you calculate E(R) by above formula then Correct option is Option A as it is having positive E(R) as compared to other bonds.
Hope this helps!
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