Bond Yield and Bond Yield Inversion

  • The above concepts were in news due to global slowdown and rising fear of recession.
  • Bond is a debt instrument issued by a country’s government or by a company to raise funds and having a maturity period of more than one year.
  • Bond Yield is theeffective rate of return or the profit that the bond earns and is calculated by dividing the bond's coupon rate by its face value. Bond Yield has an inverse relationship with the bond price.
  • Bond Yield Inversion is a phenomenon that signifies a recession. It usually occurs when the yield on a longer tenure bond becomes less than ....
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