Flat yield curve: Difference between revisions
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imported>Doug Williamson m (Spacing 27/8/13) |
imported>Doug Williamson (Spacing, and remove erroneous heading.) |
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This means that the yield is the same for all maturities of funds. | This means that the yield is the same for all maturities of funds. | ||
For example the 1 year yield = 2 year yield = 3 year yield, and so on. | For example the 1 year yield = 2 year yield = 3 year yield, and so on. | ||
The relationships between the zero coupon yield, the forward yield, and the par yield depend on the basis on which the yields are quoted. | The relationships between the zero coupon yield, the forward yield, and the par yield depend on the basis on which the yields are quoted. | ||
When all rates are quoted on an annual effective rate basis and the annual effective yield curve is flat, the zero coupon yield, the forward yield and the par yield are all the same. | When all rates are quoted on an annual effective rate basis and the annual effective yield curve is flat, the zero coupon yield, the forward yield and the par yield are all the same, and all flat. | ||
Revision as of 20:38, 4 December 2013
This means that the yield is the same for all maturities of funds.
For example the 1 year yield = 2 year yield = 3 year yield, and so on.
The relationships between the zero coupon yield, the forward yield, and the par yield depend on the basis on which the yields are quoted.
When all rates are quoted on an annual effective rate basis and the annual effective yield curve is flat, the zero coupon yield, the forward yield and the par yield are all the same, and all flat.
