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The glossary is a collection of terms, definitions and expressions used in the debt capital markets. It has been sorted alphabetically by term.
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Yield: The interest rate which can be earned on an investment, currently quoted by the market or implied by the current market price for the investment – as opposed to the coupon paid by an issuer on a security, which is based on the coupon rate and the face value. For a bond, generally the same as yield to maturity unless otherwise specified.

Yield curve: Graphical representation of the maturity structure of interest rates, plotting yields of bonds that are all of the same class or credit quality against the maturity of the bonds.

Yield to equivalent life: The same as yield to maturity for a bond with partial redemptions.

Yield to maturity: The internal rate of return of a bond – the yield necessary to discount all the bond’s cash flows to an NPV equal to its current price. See current yield, gross redemption yield, simple yield to maturity.

Yield-curve option: Option that allows purchasers to take a view on a yield curve without having to take a view about a market’s direction.

Yield-curve swap: Swap in which the index rates of the two interest streams are at different points on the yield curve. Both payments are refixed with the same frequency whatever the index rate.

 

Glossary

The YieldCurve.com glossary is a list of terms commonly encountered in the debt capital markets.
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Select a letter: A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

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