Ebook Investment analysis & portfolio management (Tenth edition): Part 2
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Ebook Investment analysis & portfolio management (Tenth edition): Part 2
PARTAnalysis and Management of BondsChapter 17Bond FundamentalsChapter 18The Analysis and Valuation of BondsChapter 19Bond Portfolio Management Strate Ebook Investment analysis & portfolio management (Tenth edition): Part 2 egies589For most investors, bonds receive limited attention and very little respect. This is surprising when one considers that the total market value of the bond market in the United States and in most other countries is substantially larger than the market value of the stock market. For example, a Ebook Investment analysis & portfolio management (Tenth edition): Part 2 t the end of 2010 the market value of all publicly issued bonds in the U.S. was more than S30 trillion, while the market value of all stocks was aboutEbook Investment analysis & portfolio management (Tenth edition): Part 2
$18 trillion. On a global basis, the values are about $61 trillion for bonds versus $43 trillion for stocks. Beyond the size factor, bonds have a repPARTAnalysis and Management of BondsChapter 17Bond FundamentalsChapter 18The Analysis and Valuation of BondsChapter 19Bond Portfolio Management Strate Ebook Investment analysis & portfolio management (Tenth edition): Part 2 ars. Specifically, the average annual compound rate of return on government/corporate bonds for the period 1980-2010 was over 8 percent versus almost 11 percent for common stocks. These rates of return along with corresponding standard deviations (6 percent for bonds versus 16 percent for stocks) an Ebook Investment analysis & portfolio management (Tenth edition): Part 2 d the relatively low correlation between stocks and bonds (about 0.21) indicate that there arc substantial opportunities in bonds for individual and iEbook Investment analysis & portfolio management (Tenth edition): Part 2
nstitutional investors to enhance their risk-return performance.The chapters in this section are intended to provide (1) a basic understanding of bondPARTAnalysis and Management of BondsChapter 17Bond FundamentalsChapter 18The Analysis and Valuation of BondsChapter 19Bond Portfolio Management Strate Ebook Investment analysis & portfolio management (Tenth edition): Part 2 ds, including numerous new fixed-income securities with very unusual cash flow characteristics, and (4) an understanding of either active or passive bond portfolio management.Chapter 17describes the global bond market in terms of country participation and the makeup of the bond market in major count Ebook Investment analysis & portfolio management (Tenth edition): Part 2 ries. Also, we examine characteristics of bonds in alternative categories, such as government, corporate, and municipal. We also discuss the many newEbook Investment analysis & portfolio management (Tenth edition): Part 2
corporate bond instruments developed in the United States, such as asset-backed securities, zero-coupon bonds, high-yield bonds, and inflation protectPARTAnalysis and Management of BondsChapter 17Bond FundamentalsChapter 18The Analysis and Valuation of BondsChapter 19Bond Portfolio Management Strate Ebook Investment analysis & portfolio management (Tenth edition): Part 2 ntually be used around the world. Finally, we consider sources of price information needed by bond investors.Chapter 18is concerned with the analysis and valuation of bonds. This includes a detailed discussion of how one values a bond using a single discount rate or using spot rates. We also evaluat Ebook Investment analysis & portfolio management (Tenth edition): Part 2 e alternative rate of return measures for bonds. Subsequently, we consider what factors affect yields on bonds and what characteristics influence theEbook Investment analysis & portfolio management (Tenth edition): Part 2
volatility of bond returns, including the very important concept of bond duration, which is a measure of bond price volatility that is important in acPARTAnalysis and Management of BondsChapter 17Bond FundamentalsChapter 18The Analysis and Valuation of BondsChapter 19Bond Portfolio Management Strate Ebook Investment analysis & portfolio management (Tenth edition): Part 2 e examined for option-free secunties. We also consider how they apply to a growing set of securities with embedded options.Chapter 19considers how to use the background provided in Chapter 17 and Chapter 18 to create and manage a bond portfolio. We consider three major categories of portfolio strate Ebook Investment analysis & portfolio management (Tenth edition): Part 2 gies in detail. The first is passive portfolio management strategies, which include either a simple buy-and-hold strategy or indexing to one of the maEbook Investment analysis & portfolio management (Tenth edition): Part 2
jor benchmarks. The second category includes active management strategies that can involve one of five alternatives: interest rate anticipation, valuaPARTAnalysis and Management of BondsChapter 17Bond FundamentalsChapter 18The Analysis and Valuation of BondsChapter 19Bond Portfolio Management Strate Ebook Investment analysis & portfolio management (Tenth edition): Part 2 ng dedicated portfolios, constructing classical or contingent immunization portfolios, or horizon matching.The fact that three fairly long chapters are devoted to the study of bonds attests to the importance of the topic and the extensive research done in this area. During the past 20 years, there h Ebook Investment analysis & portfolio management (Tenth edition): Part 2 ave been more developments related to the valuation and portfolio management of bonds than of stocks. This growth of the fixed-income sector does notEbook Investment analysis & portfolio management (Tenth edition): Part 2
detract from the importance of equities but certainly enhances the significance of fixed-income securities. Finally, readers should keep in mind that PARTAnalysis and Management of BondsChapter 17Bond FundamentalsChapter 18The Analysis and Valuation of BondsChapter 19Bond Portfolio Management Strate Ebook Investment analysis & portfolio management (Tenth edition): Part 2 g trading these securities, valuation, credit analysis, and domestic and global portfolio management.After you read this chapter, you should be able to answer the following questions:•What are some of the basic features of bonds that affect their risk, return, and value?•What is the current country Ebook Investment analysis & portfolio management (Tenth edition): Part 2 structure of the world bond market, and how has the makeup of the global bond market changed in recent years?•What are the major components of the worEbook Investment analysis & portfolio management (Tenth edition): Part 2
ld bond market and the international bond market?•How does the makeup of the bond market differ in major countries?•What are bond ratings, and what isPARTAnalysis and Management of BondsChapter 17Bond FundamentalsChapter 18The Analysis and Valuation of BondsChapter 19Bond Portfolio Management Strate Ebook Investment analysis & portfolio management (Tenth edition): Part 2 bond categories, such as governments (including TIPS), agencies, municipalities, and corporates?•What are the important characteristics of corporate bond issues developed in the United States during the past decade, such as mortgage-backed securities, other asset-backed securities, zero-coupon and d Ebook Investment analysis & portfolio management (Tenth edition): Part 2 eep discount bonds, high-yield bonds, and struơured notes?•How do you read the quotes available for the alternative bond categories (e.g., governmentsEbook Investment analysis & portfolio management (Tenth edition): Part 2
, municipalities, and corporates)?The global bond market is large and diverse and represents an important investment opportunity. This chapter is concPARTAnalysis and Management of BondsChapter 17Bond FundamentalsChapter 18The Analysis and Valuation of BondsChapter 19Bond Portfolio Management Strate Ebook Investment analysis & portfolio management (Tenth edition): Part 2 later chapters, we consider preferred stock and convertible bonds. An understanding of bonds is helpful in an efficient market because the existence of U.S. and foreign bonds increases the universe of investments available for the creation of a diversified portfolio.In this chapter, we review some Ebook Investment analysis & portfolio management (Tenth edition): Part 2 basic features of bonds and examine the structure of the world bond market. The bulk of the chapter involves an in-depth discussion of the major fixedEbook Investment analysis & portfolio management (Tenth edition): Part 2
-income investments. The chapter ends with a brief review of the price information sources for bond investors. The reader may also want to revisit ChaPARTAnalysis and Management of BondsChapter 17Bond FundamentalsChapter 18The Analysis and Valuation of BondsChapter 19Bond Portfolio Management Strate Ebook Investment analysis & portfolio management (Tenth edition): Part 2 c long-term, fixed-obligation debt securities packaged in convenient, affordable denominations for sale to individuals and financial institutions. They diifer from other debt, such as individual mortgages and privately placed debt obligations, because they arc sold to the public rather than channele Ebook Investment analysis & portfolio management (Tenth edition): Part 2 d directly to a single lender. Bond issues arc considered fixed-income591https://khothuvien.cori!592 Part 5: Analysis and Management of BondssecuritieEbook Investment analysis & portfolio management (Tenth edition): Part 2
s because they impose fixed financial obligations on the issuers. Specifically, the issuer of a bond agrees to:1.Pay a fixed amount of interest periodPARTAnalysis and Management of BondsChapter 17Bond FundamentalsChapter 18The Analysis and Valuation of BondsChapter 19Bond Portfolio Management Strate Ebook Investment analysis & portfolio management (Tenth edition): Part 2 h some bond issues pay in intervals as short as a month or as long as a year, llie principal is due at maturity; this par value of the issue is rarely less than $1,000. A bond has a specified term to maturity, which defines the life of the issue. The public debt market typically is divided into thre Ebook Investment analysis & portfolio management (Tenth edition): Part 2 e time segments based on an issue’s original maturity:1.Short-term issues with maturities of one year or less. The market for these instruments is comEbook Investment analysis & portfolio management (Tenth edition): Part 2
monly known as the money market.PARTAnalysis and Management of BondsChapter 17Bond FundamentalsChapter 18The Analysis and Valuation of BondsChapter 19Bond Portfolio Management StrateGọi ngay
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