The announcement led to a 17-month low on Japanese corporate bond risk, and Japanese stocks rallied on the news.
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Individual investors can quantify their bond portfolios risk by knowing what their duration is.
If anything, the risk neutral yield on the bond will be greater than warranted by the actual riskiness of the bond, due to market risk aversion.
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If joy at higher growth or fear of inflation do not justify higher bond yields, is there not a risk that the bond market might cause the recovery to stall?
If I can open a frozen yogurt stand for 10, 000 dollars and get a 10% rate of return, then I will prefer the yogurt stand investment to a bond of similar risk which is offering 6%.
The emerging markets bond, with its risk premium, is up 3.39% and the US Treasury bond fund is up 0.54%.
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But the market is saying that they've learned a little about controlling bond inventories and margin risk.
Bond managers assess debt risk by performing discovery on what is the sustainable gross domestic growth for the country compared to its debt.
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With other bond funds, investors risk getting back a lot less than their original cost if interest rates rise, because that pushes bonds' market prices down.
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The risk for bond investors is that the first wave of sellers will cause a 2nd wave of sellers, leaving the 3rd wave with portfolio losses.
It means that like stock funds, bond funds also have some risk associated with them.
In that context, the risk of a bond market collapse akin to 1994 is not immaterial.
Part of their concern is tied to the explosion in the high-risk or junk bond market.
Nervousness that Greece will miss its late March bond payment deadline could curb risk appetite for investors in coming weeks.
Basically, investors are willing to pay more, or accept a lower yield, on a shorter-term bond because there is less risk.
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There are strategies that can be used without exposing yourself to significantly more credit risk (the risk of a bond issuer defaulting).
There is no way to eliminate risk from a bond portfolio without settling for the puny 1.7% yield available on Treasury bills.
Market transparency demands that a buyer in due course be made aware of what would otherwise be a hidden risk in a bond.
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He further pointed out that some bond investors are viewing credit risk (the chances of a company defaulting on its debt) as less of a concern than interest rate risk (the chances of interest rates rising).
Bond investors have become choosier about sovereign credit risk, so some euro-area borrowers have had to stump up higher coupons for their recent bond issues.
Most important, at least so far, bond funds have generally offered better risk-adjusted performance .
Michael Milken argues persuasively that today's low-quality bond is tomorrow's prime risk and vice versa.
The panic into Treasuries surprised most bond operators who missed the less risk is more gain hypothesis.
In times of falling equity or commodity markets, rising bond yields, inflation or increasing risk aversion, gold shines.
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Maybe even over 100% of the return that was experienced in traditional bond funds was experienced through duration risk.
Prepayment risk is the risk that a given bond issue will be paid off earlier than expected, normally through a call provision.
In the current European crisis, ratings firms had begun to downgrade peripheral euro-zone countries years before bond markets woke up to default risk.
Bond investors are typically compensated for risk through higher yields.
The researchers are now seeking funding to carry on their research so they can evaluate what level of disulphide bond indicates that someone is at risk of osteoporosis, or that they already have the disease.
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