Concept explainers
To discuss: Whether the bid yield would be larger than the ask yield
Introduction:
Bid price refers to the price that an investor would be willing to pay to buy the security. Ask price refers to the price that a dealer would be ready to accept in exchange for the sale of bond or security instrument.
Yields refer to the
Bid yield refers to the yield that the investor would achieve from a bond instrument if he or she purchases the bond at the bid price and holds the bond until it matures. Ask yield refers to the yield that the investor would achieve from a bond instrument if he or she purchases the bond at the ask price and holds the bond until it matures.
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Fundamentals of Corporate Finance
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