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Xenocurrency is currency that trades outside of its own borders.
- Browse Related Terms: Arbitrage, Balance of trade, Decimal pricing, Downtick, Efficient market, Moving average, Odd lot, Round lot, Xenocurrency
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Yankee bonds are bonds issued in dollars in the United States by overseas companies and governments.
The purpose is to raise more money than the issuers may be able to borrow in their home markets, either because there is more money available for investment in the United States, or because the interest rate the issuers must pay to attract investors is lower.
US investors buy these bonds as a way to diversify into overseas markets without the potential drawbacks of currency fluctuation, foreign tax, or different standards of disclosure that may be characteristic of other markets.
- Browse Related Terms: Brady bond, Central bank, Depository Trust and Clearing Corporation (DTCC), Devaluation, Euro, Eurobond, Eurocurrency, Exchange Rate, Floating rate, Global depositary receipt (GDR), International Monetary Fund (IMF), Monetary policy, Monetary reserve, Open market, World Bank, Yankee bond
Yield is most commonly associated with a money market fund's return. "Current Yield" is based on daily return, "Effective Yield" on the annual compounded return. Yield to Maturity: The annual rate of return an investor would receive if a bond were held until maturity.
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The return on an investor’s capital investment.
The return on an investor's capital investment.
- Browse Related Terms: Asset, Asset Backed Securities, CMOs (Collateralized Mortgage Obligations), Collateralized Mortgage Obligation (CMO), Modified Duration, Mortgage backed security, Par Value, trust, Yield
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Yield is the rate of return on an investment expressed as a percent.
Yield is usually calculated by dividing the amount you receive annually in dividends or interest by the amount you spent to buy the investment.
In the case of stocks, yield is the dividend you receive per share divided by the stock's price per share. With bonds, it is the interest divided by the price you paid. Current yield, in contrast, is the interest or dividends divided by the current market price.
In the case of bonds, the yield on your investment and the interest rate your investment pays are sometimes, but by no means always, the same. If the price you pay for a bond is higher or lower than par, the yield will be different from the interest rate.
For example, if you pay $950 for a bond with a par value of $1,000 that pays 6% interest, or $60 a year, your yield is 6.3% ($60 ÷ $950 = 0.0631). But if you paid $1,100 for the same bond, your yield would be only 5.5% ($60 ÷ $1,100 = 0.0545).
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Percentage of return on an investment.
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A graph showing the term structure of interest rates by plotting the yields of all bonds of the same quality with maturities ranging from the shortest to the longest possible. The Y-axis represents the interest rate and the X-axis represents time with a normal curve being convex in shape.
A graph showing the term structure of interest rates by plotting the yields of all bonds of the same quality with maturities ranging from the shortest to the longest possible. The Y-axis represents the interest rate and the X-axis represents time with a normal curve being convex in shape.
- Browse Related Terms: Basis Point (bp), Benchmark, bp (Basis Point), Capital Gain, Endowment Funds, Loss (Realized Gain), Loss (Unrealized Gain), Non-endowment Funds, Operating Monies, Realized Gain (Loss), Reverse Repurchase Agreement, Unrealized Gain (Loss), Yield Curve, Yield to Maturity
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A yield curve shows the relationship between the yields on short-term and long-term bonds of the same investment quality.
Since long-term rates are characteristically higher than short-term rates, a yield curve that confirms that expectation is described as positive. In contrast, a negative yield curve occurs when short-term rates are higher.
A flat or level yield curve occurs when the rates are substantially the same.
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A measure of the average rate of return that will be earned on a bond if held to maturity.
A measure of the average rate of return that will be earned on a bond if held to maturity.
- Browse Related Terms: Basis Point (bp), Benchmark, bp (Basis Point), Capital Gain, Endowment Funds, Loss (Realized Gain), Loss (Unrealized Gain), Non-endowment Funds, Operating Monies, Realized Gain (Loss), Reverse Repurchase Agreement, Unrealized Gain (Loss), Yield Curve, Yield to Maturity
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Yield to maturity is the most precise measure of a bond's anticipated return and determines its current market price.
YTM takes into account the coupon rate and the current interest rate in relation to the price, the purchase or discount price in relation to the par value, and the years remaining until the bond matures.
Although YTM figures are complex to calculate, brokers will supply this information if you ask, or you can use a calculator programmed to provide YTM figures.
- Browse Related Terms: Average annual yield, Basis point, Current return, current yield, Equivalent taxable yield, Nominal yield, Rate of return, Spread, Yield, Yield to maturity (YTM)
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Most insurance companies charge higher rates for young drivers between the ages of 16 and 25.
- Browse Related Terms: Benchmark rate(s), Credit score, Non-Bound Application, Proof of loss, Quotation or Quote, Quote, Underwriter, Underwriting, Youthful Driver
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This Chicago-based company tracks changes in earnings estimates, as well as buy, sell, and hold recommendations for approximately 5,000 stocks.
The information is provided by more than 3,500 financial analysts at more than 210 brokerage firms.
Based on its research, Zacks compiles consensus earnings estimates, industry group reports, and company reports that are widely followed by both individual and institutional investors.
The service is available to all investors by subscription.
- Browse Related Terms: Alpha, Book value, Dividend yield, Earnings estimate, Earnings momentum, Earnings surprise, Forward price-to-earnings ratio, Multiple, Outstanding shares, Price-to-book ratio, Price-to-earnings ratio (P/E), Price-to-sales ratio, Quarter, risk ratio, Special situation, Undervaluation, valuation, Value stock, Whisper number, Zacks Investment Research
A corporate or municipal debt security sold at a deep discount to its face value that does not pay periodic interest. The profit is realized when the bond is redeemed at maturity for its full face value.
- Browse Related Terms: bond, capital gain or loss, cash equivalent, Debt, income fund, Interest, Maturity, money market, money-market fund, real return, realized and unrealized gain/loss, Risk, treasury bills (t-bills), Zero-coupon bond
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Zero-coupon bonds, sometimes known as zeros, are issued at a deep discount to par value and pay no interest during their term.
At maturity, the bondholder receives par value, which includes the interest that has accrued since issue. For example, you may purchase a zero-coupon bond with a six-year term for $13,500, and collect $20,000 at maturity.
One advantage of zeros is that you can invest relatively smaller amounts and choose maturity dates to coincide with times you know you'll need the money - for example, when you expect college tuition bills to come due.
One drawback of zeros, however, is that income taxes are due annually on the interest that accrues, even though you don't receive the actual payment until the bond matures.
The exception occurs if you buy tax-exempt municipal zeros, on which no tax is due either during the term or at maturity. Another drawback is that zero coupon bonds are volatile in the secondary market, so if you have to sell before maturity, you might have a loss.
These bonds get their name - zero coupon - from the fact that coupon means interest in bond terminology, and there's no periodic interest.
- Browse Related Terms: Callable bond, Conversion price, Convertible bond, Deep discount bond, Exchange traded notes, Gilt-edged security, Indenture, Noncallable, Original issue discount, Par Value, Prerefunding, Redemption, Sinking fund, Zero-coupon bond, Zero-coupon convertible bond
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A zero-coupon convertible bond, like other convertible bonds, can be converted into stock in the issuing corporation if the stock reaches the trigger price.
Municipalities may issue tax-exempt zero-coupon convertible bonds you can exchange before maturity for conventional taxable bonds.
The advantage of both taxable and tax-exempt zero-coupon convertibles is that they give you access to a potentially substantial gain for a small initial investment since you purchase the zero-coupon for less than the face value. But like all zero-coupons, these convertibles tend to be more volatile in the secondary market than nonconvertible bonds.
- Browse Related Terms: Callable bond, Conversion price, Convertible bond, Deep discount bond, Exchange traded notes, Gilt-edged security, Indenture, Noncallable, Original issue discount, Par Value, Prerefunding, Redemption, Sinking fund, Zero-coupon bond, Zero-coupon convertible bond
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A zero-sum market is one in which one investor's profit mirrors another investor's loss. For every dollar one person makes, someone else loses a dollar. Commodities and options markets are examples of zero-sum markets. Stock markets are not.
- Browse Related Terms: Cash settlement, Clearinghouse, Closing price, Commodity, Daily trading limit, derivative, Financial future, Fungible, Futures contract, Go long, Hedger, Open interest, Speculator, Trade date, Trading volume, Unit of trading, Weather derivative, Zero sum
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A geographical area shown on a Flood Hazard Boundary Map or a Flood Insurance Rate Map that reflects the severity or type of flooding in the area.
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