Slang for a billion. Slang for milliard, one thousand
The graph showing changes in yield on instruments
depending on time to maturity. A system originally
developed in the bond markets is now broadly applied to
various financial futures. A positive sloping curve has
lower interest rates at the shorter maturities and higher
at the longer maturities. A negative sloping curve has
higher interest rates at the shorter maturities.
Yield-to-average life (see Interest calculations).
A yield that assumes the entire issue amount matures on
the average life date rather than the maturity date. This
is a quick and dirty method for comparing bonds with
sinking funds with straight issues Average Life).
Yield-to-equivalent life (see Interest calculations).
The discount rate that equates the present value of the
future cash flows to the dirty price, where the cash flows
take into account the bond's amortization schedule. This
calculation is appropriate for sinking funds; however, it
is rarely used because of its complexity Equivalent Life).
Yield-to-maturity (see Interest calculations).
The yield if the bond is held to maturity. This is the
most frequently used measure of value for a bond.
Generally, the calculation is a function of coupon
payments, dirty price, and the method for discounting
coupons and the redemption value. However, the exact
functional form is determined by market or dealer