Yield Basis

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Dictionary Says

Definition of 'Yield Basis'

A method of quoting the price of a fixed-income security as a yield percentage, rather than in dollars. This allows bonds with varying characteristics to be easily compared.
Investopedia Says

Investopedia explains 'Yield Basis'

Unlike stocks, which are quoted in dollars, most bond quotes include a yield %. For example, Corp. ZZZ is listed with a  6.75% coupon, a Sept 04/20 maturity, has a dollar value of 94.00 and a yield of 9%.

This bond quote tells a bond trader that the bond is currently trading at a discount because its yield basis (9%) is greater than its coupon rate (6.75%). A bond trader could then compare the bond to others within a certain industry.

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Search results for

'Yield Basis'

  • CFA Level 1 Study Guide - Fixed Income Investments - Yield Curve ...

    http://www.investopedia.com/exam-guide/cfa-level-1/fixed-income-investments/yield-curve-risk.asp
    ... 14.40 Assumptions Underlying Traditional Yield Curve Measures; 14.41 Importance
    of Reinvestment ... Duration; 14.49 Convexity; 14.50 Price Value of a Basis Point (PVBP ...

  • What is a basis point (BPS)?

    http://www.investopedia.com/ask/answers/05/basispoint.asp
    ... In the bond market, a basis point is used to refer to the yield that a bond
    pays to the investor. For example, if a bond yield moves ...

  • CFA Level 1 Study Guide - Fixed Income Investments - Price Value ...

    http://www.investopedia.com/exam-guide/cfa-level-1/fixed-income-investments/price-value-basis-point.asp
    ... 14.40 Assumptions Underlying Traditional Yield Curve Measures; 14.41 Importance
    of Reinvestment ... Duration; 14.49 Convexity; 14.50 Price Value of a Basis Point (PVBP ...

  • CFA Level 1 Study Guide - Fixed Income Investments - Types of ...

    http://www.investopedia.com/exam-guide/cfa-level-1/fixed-income-investments/yield-measurement-types.asp
    ... 14.40 Assumptions Underlying Traditional Yield Curve Measures; 14.41 Importance
    of Reinvestment ... Duration; 14.49 Convexity; 14.50 Price Value of a Basis Point (PVBP ...

  • Series 7 Study Guide - Debt Securities - Computing T-bill Discount ...

    http://www.investopedia.com/exam-guide/series-7/debt-securities/compute-treasury-discount-yield.asp
    ... Computing a T-bill's discount yield is a three-step process. ... Sometimes
    bond traders refer to "basis points" or "BPs" or "beeps". ...

  • Sin Stocks: The Natural Choice

    http://stocks.investopedia.com/stock-analysis/2010/Investing-In-Sin-Stocks-The-Natural-Choice-VGR-MO-LO-PM-RAI-BTI0428.aspx
    ... On a dividend yield basis, Vector's forward annual dividend yield is priced at 9.8%,
    far surpassing even the next-best forward yield of 6.6% currently offered ...

  • Advanced Bond Concepts: Yield and Bond Price | Investopedia

    http://www.investopedia.com/university/advancedbond/advancedbond3.asp
    ... In general, as a bond's price increases, yield decreases. This relationship
    is measured using the price value of a basis point (PVBP). ...

  • CFA Level 1 Study Guide - Quantitative Methods - Calculating Yield ...

    http://www.investopedia.com/exam-guide/cfa-level-1/quantitative-methods/discounted-cash-flow-yield.asp
    ... 14.40 Assumptions Underlying Traditional Yield Curve Measures; 14.41 Importance
    of Reinvestment ... Duration; 14.49 Convexity; 14.50 Price Value of a Basis Point (PVBP ...

  • CFA Level 1 Study Guide - Ethics and Standards - Standard VA ...

    http://www.investopedia.com/exam-guide/cfa-level-1/ethics-standards/standard-diligence-reasonable-basis.asp
    ... 14.40 Assumptions Underlying Traditional Yield Curve Measures; 14.41 Importance
    of Reinvestment ... Duration; 14.49 Convexity; 14.50 Price Value of a Basis Point (PVBP ...

  • How To Compare Yields On Different Bonds

    http://www.investopedia.com/articles/bonds/08/bond-yield-convention-conversion.asp
    ... Because fixed-income investments use a variety of yield conventions, it is important
    to convert the yield to a common basis when comparing different bonds. ...

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