Friday, November 11, 2011
Notes on Yield Spreads
1. Understand what is on X axis and Y axis for Yield Curve.
2. Shapes of Yield Curves
3. Theories which Determines Shape of the Yield Curve.
a. Pure Expectations Theory
b. Liquidity Premium Theory
c. Market Segmentation Theory
4. Treasury Spot Rates -- simplest way to think is Zero Coupon Bond.
5. Stripping -- Dealers effectively create Treasury Securities the securities
which are not created by Treasury Dept.
6. Yield Spreads
a. Absolute spread = Higher yield - Lower Yield
b. Relative Spread = Absolute Spread / Subject Bond
c. Yield Ratio = Subject Bond / Benchmark Bond
Credit goes to ArifIrfanUllah.com
2. Shapes of Yield Curves
3. Theories which Determines Shape of the Yield Curve.
a. Pure Expectations Theory
b. Liquidity Premium Theory
c. Market Segmentation Theory
4. Treasury Spot Rates -- simplest way to think is Zero Coupon Bond.
5. Stripping -- Dealers effectively create Treasury Securities the securities
which are not created by Treasury Dept.
6. Yield Spreads
a. Absolute spread = Higher yield - Lower Yield
b. Relative Spread = Absolute Spread / Subject Bond
c. Yield Ratio = Subject Bond / Benchmark Bond
Credit goes to ArifIrfanUllah.com
Tuesday, September 20, 2011
About me and Blog
About me and Blog :
I came from Software Background and completely new to Finance so I thought to share my understanding and my Journey in finance in simple terms. In my view in this Global Economy every person should know basic finance and economics to make better decisions for everyday living.
Good Videos
http://www.arifirfanullah.com/cfa-video-lectures
I came from Software Background and completely new to Finance so I thought to share my understanding and my Journey in finance in simple terms. In my view in this Global Economy every person should know basic finance and economics to make better decisions for everyday living.
Good Videos
http://www.arifirfanullah.com/cfa-video-lectures
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