What are the reasons for the different yields of different zero coupon bonds?

Depending on the remaining maturity, the yield of the bond varies. In addition, if the type of bond is different, the yield will also be different.

There are 3 differences in the coupon rate and yield of bonds:

First, the overview of the two is different:

1. Overview of bond coupon rate: refers to the annual interest rate of the bond, which is equivalent to a certain percentage of the face value of the bond.

2. Overview of bond yield: refers to the ratio between the total annual income generated by investing in bonds and the total amount of principal invested.

Second, the types of the two are different:

1. Types of bond coupon rates: Coupon rates can be fixed (i.e., the interest rate is fixed throughout the term of the bond, as is the case for foreign exchange ** bonds), floating (i.e., the interest rate is determined on a regular basis by a certain reference rate, such as the Hong Kong Interbank Offered Rate or the London Interbank Offered Rate plus a certain difference) or zero interest rate. In the case of foreign exchange** bonds, for example, interest calculated at the coupon rate is paid semi-annually.

2. Types of bond yields:

1) Current yield: The current yield, also known as the direct yield, refers to the income generated by interest income, which is usually paid twice a year, and it accounts for the majority of the income generated by corporate bonds. Current yield is the yield calculated by dividing the annual interest rate of the bond by the current market ** of the bond.

It does not take into account the capital gains or losses made on the investment in bonds, but only measures the ratio of cash income received on bonds over a period of time**.

2) Yield to maturity: The so-called yield to maturity refers to the income obtained by holding the bond to the repayment period, including all the interest at maturity. The yield to maturity, also known as the final rate of return, is the internal rate of return of the investment in the purchase of treasury bonds, that is, the discount rate at which the present value of the future cash flows obtained by the investment in the purchase of treasury bonds is equal to the current market price of the bond.

It is equivalent to the average annual yield that an investor can earn by buying at the current market** and holding it until maturity.

3) Early redemption rate: The yield obtained by investors when the bond issuer redeems the bond before the specified maturity date of the bond.

3. The roles of the two are different:

1. The role of bond coupon rate: The maturity time of the bond determines the time for the bond investor to obtain future cash flow, and the coupon rate determines the size of the future cash flow. All other things being equal, the lower the coupon rate of a bond, the greater the volatility of the bond** with the expected yield.

In other words, for a given magnitude of yield change, the coupon rate of a bond is inversely proportional to the volatility of the bond**.

2. The role of bond yield: The bond yield curve is a curve that describes the quantitative relationship between the yield of a group of tradable bonds and its remaining maturity period at a certain point in time, that is, in the Cartesian coordinate system, the curve drawn with the remaining maturity period of the bond as the abscissa and the bond yield as the ordinate. The main factors that determine the yield of a bond are the coupon rate, maturity, face value, holding time, purchase ** and ****.

Hello landlord; The coupon rate you mean is the "face value" of the bond, that is, the percentage of the return of the issue price over a one-year period, and the "yield to maturity" is the total return of the bond to the agreed maturity. Yield to maturity = total interest (i.e. coupon rate multiplied by term) plus face value. Less enough to buy**.

Divide by Purchase**. Multiply the holding period. I don't know if you can understand? Thank you.

Terminology and credit rating are different.

The effective interest rate (yield) of a bond > the coupon rate (coupon rate), and the issuance of a bond** is below par value.

For example: the face value is 1000 yuan, the coupon rate is 5%, the effective interest rate is 6%, and the term is 1 year.

Issuance**=1000 (1+6%)+1000*5% (1+6%)=

No, it is paid at face value.

Under certain conditions, the spot yield isYield to maturity。The spot yield is a zero-coupon rate, that is, the yield of a type of Treasury bond that has no interest halfway through and is settled at the last time. The yield to maturity is the yield on the bond held until the repayment period, including the full interest at maturity.

The spot yield reflects the income that can be obtained through the interest income calculated according to the coupon rate of the bond when purchasing the bond at the current **, but does not take into account the capital gains that can be obtained from the bid-ask spread of the bond, so it cannot fully reflect the income of the bond investment.

Considerations for investing in zero-coupon bonds.

As the maturity date gets closer and closer, the market of the bond will get closer and closer to the par value, that is, it will get higher and higher, moving towards its original value. So the closer to maturity, the less risk there is (e.g. inflationary impact, default risk).

exchange rate risk).

In addition, in the international bond market, a large part of it is zero-coupon bonds, such as the United States**.

Zero-coupon bonds, South Africa.

Zero-coupon bonds are very popular investment targets. Interested investors can go to **company** to learn about buying and selling.

False, a non-interest-bearing bond is a bond that pays interest on a lump sum basis with compound interest.

Zero-coupon bonds are bonds issued at a discount without coupon and with a lump sum principal and interest payment at face value at maturity.

Zero-coupon bonds are bonds issued at a discount without coupon and with a lump sum principal and interest payment at face value at maturity. Zero-coupon bonds are issued at a rate lower than par at the time of issuance, and at par at the time of redemption, and their interest is implied between the issuance** and the redemption**.

Among the varieties of bond investment, there are treasury bonds and corporate bonds.

Credit bonds, convertible bonds.

And so on, these common bonds, investment is more familiar, there are ** listed companies to issue zero-coupon bonds for financing, is it not necessary to pay interest for bond financing, so that not financial experts do not understand, what is a zero-coupon bond, what are its characteristics?

1. Zero-coupon bonds

Zero-coupon bonds, also known as discount bonds, refer to bonds issued at a lower face value than the coupon ** at the time of issuance, and exchanged in full after maturity.

For example, a listed company issues a zero-coupon bond with a face value of 95 yuan and a term of 100 yuan, which means that the investor pays 95 yuan to subscribe to the bond, and after holding it for one year, the investor can settle according to the ** of 100 yuan, of which the difference of 4 yuan is the expected return on investment.

2. Characteristics of zero-coupon bonds

1) Compared with other bonds, issued at a discount to the face value, the discount rate is actually the expected yield of the bond.

2) After the maturity of the holding, the zero-coupon bond will be paid in full and no additional bond interest will be paid.

3) Compared with other bonds, if during the issuance period, regardless of the interest rate** or **, zero-coupon bonds cannot be redeemed in advance, and the discount rate remains unchanged.

4) According to the relevant regulations, investors need to pay individual income tax when they receive bond interest and Songyou Yu** dividend income.

In many countries or regions, zero-coupon bonds can avoid taxes well because they do not pay interest, indirectly increase the expected return on investment, and have a tax-saving function.

The above four points are the basic characteristics of zero-coupon bonds, after reading it, I believe that everyone will be familiar with zero-coupon bonds, and it will also be a common bond investment tool in the future. Tips: There are risks in financial management, and investment needs to be cautious.

Calculation formula: PV=CF (1+I) N, i is the yield to maturity; CF is the face value on the maturity date; PV is the current price; n is the remaining maturity of the bond (years). Yield to maturity = (maturity price - purchase price + fixed interest) Holding time Buying price.

will be specific to the bond yield.

Once you have a clear understanding of the formula, you can calculate the yield of buying different treasury bonds during the holding period at any time, so that you can compare this yield with the bank's late-return rate and weigh how the amount can be invested. 1. The discount method of zero-coupon bonds is generally the method of lower than the face value, and the interest rate of the bond.

It is also determined by the issuance discount rate.

decided; 2. The cashing time of zero-coupon bonds is fixed, and when the bonds expire, individuals can repay the loans according to the face value of the bonds, without considering the issue of interest payment;

3. Zero-coupon bonds are hugely attractive to investors, because the yield of zero-coupon bonds is very high;

4. Zero-coupon bonds can reduce a lot of interest income tax, so zero-coupon bonds are favored by investors by virtue of their tax advantages.

Extended information: Zero-coupon bonds also have many advantages, if you buy a zero-coupon bond, you do not need to pay interest every year, and if you need to pay, the amount paid is also very small. The tax law has relevant provisions for zero-coupon bonds, and the discount amount at the time of issuance of zero-coupon bonds can be amortized.

Of course, there are drawbacks to zero-coupon bonds, which are usually not redeemable early.

This calculator is used to calculate the annualized rate of return during the holding period and maturity of one-time debt repayment bonds and zero-coupon bonds.

Simple interest included. There are two kinds of calculation references for compound interest. "Lump sum debt repayment bonds"and"Zero-coupon bonds"During the holding period, no interest will be paid, the principal and interest of the former will be paid in a lump sum at maturity, and the income of the latter will be implied in the principal repaid at maturity according to the face value of the bond.

For one-time principal and interest repayment bonds and zero-coupon bonds with a repayment period of one year or less, the yield shall be calculated at simple interest, otherwise it will be calculated at compound interest.

Curve. A yield curve made up of zero-coupon bonds.

Also known as spot yield curve in English. It is common practice for the market to theoretically derive this curve from the par yield curve, and it is often used to extrapolate the discount factor.

The parity yield curve is a yield curve made up of bonds that are selling at par.