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Risk and return

Convexity: Why It Matters, How It Works, Impacts, How to Leverage It to Optimize Your Portfolio

January 17, 2025 · Ahmad Nasrudin

Convexity measures the curvature of the relationship between a bond's price and its yield. While duration tells you how much a bond's price will change for a given parallel shift in interest rates, it assumes this relationship is linear.Convexity

Duration: How It Works, Factors Affecting It, and Managing Duration Risk

January 22, 2025 · Ahmad Nasrudin

Duration is more than just the length of time until a bond matures. It's a key measure quantifying a bond's sensitivity to interest rate fluctuations.Essentially, duration tells you how much a bond's price is likely to change when interest rates

Credit Spread: Why It Matters, Factors Affecting It, How to Profit From It

January 17, 2025 · Ahmad Nasrudin

Credit spreads, the difference in interest rates between corporate and government bonds, offer significant risk and potential reward for fixed-income investors. By understanding how credit spreads reflect issuer risk, respond to market forces, and

Default Risk: Factors Affecting It, How to Assess and Mitigate in the Bond Portfolio

January 22, 2025 · Ahmad Nasrudin

Default risk is a critical concern for fixed-income investors. Imagine this: You've carefully selected a bond, anticipating the steady stream of interest payments it promises. You're confident in its stability, picturing a reliable income

Credit Risk: Why It Matters, Types, How to Assess and Mitigate

January 22, 2025 · Ahmad Nasrudin

Credit risk is the ever-present threat that a bond issuer may fail to fulfill its contractual obligations, such as repaying principal or making interest payments. Imagine this: You carefully selected a corporate bond drawn to its attractive yield.

Reinvestment Income: Compound Growth, Benefits and Strategies for Fixed-Income Investors

January 17, 2025 · Ahmad Nasrudin

Imagine your investments working harder for you, automatically growing your wealth over time. This isn't a fantasy; it's the reality of reinvestment income.Reinvestment income refers to automatically taking the dividends, interest, and capital

Decoding Serial Maturity Structures: How They Work and Why They Matter for Investors

January 27, 2025 · Ahmad Nasrudin

Serial maturity structures significantly impact the investment experience of bondholders. Unlike traditional bonds with a single maturity date, serial maturity structures involve gradually repaying bonds within an issue over time. This staggered

Bid-Ask Spread: The Hidden Costs of Bond Trading

January 17, 2025 · Ahmad Nasrudin

Navigating the fixed-income market effectively requires a deep understanding of bid-ask spread. This seemingly small concept can significantly impact your investment returns and portfolio performance.The bid-ask spread represents the difference

Credit Quality: A Key to Maximizing Fixed-Income Returns

January 22, 2025 · Ahmad Nasrudin

Understanding credit quality is not just crucial in fixed-income investing; it's paramount. It's the foundation upon which your investment decisions are built. Credit quality reflects an issuer's ability to consistently fulfill its financial

Exploring Different Bond Coupon Payment Structures: How They Impact Your Investments

January 11, 2025 · Ahmad Nasrudin

A coupon payment is essentially the interest income you receive as a bondholder. When you invest in a bond, you are lending money to an issuer, such as a government or corporation. In return, the issuer promises to pay you regular interest payments,

Understanding Sinking Funds: How They Benefit You as a Fixed-Income Investor

January 22, 2025 · Ahmad Nasrudin

Sinking funds are a crucial strategy for fixed-income investors, as they involve an organization setting aside funds over time to retire a debt obligation. By gradually paying down the debt, this proactive approach reduces the risk of default and

Principal Repayment: Types and Factors to Consider

January 11, 2025 · Ahmad Nasrudin

Understanding how a bond's principal is repaid is essential for investors. The principal repayment structure significantly influences a bond investment's risk profile and potential returns.Key principal repayment structuresBonds are issued

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