Glossary of Terms

See Yankee bond.

A US dollar-denominated bond issued in the US domestic market by a non-US borrower.

A US dollar-denominated certificate of deposit (CD) issued in the US by a foreign bank through a US branch.

The rate of return on the current market value of an asset or liability, usually expressed as a percentage per annum.
For example, today’s yield to maturity of a bond measures the total return to an investor in the bond, reflecting both the interest income over the life of the bond and any capital gain (or loss) from today’s market value to the redemption amount payable at maturity.

When the market yield to maturity is applied to discount the future cashflows of the asset or liability, the net present value of all of the cashflows - including the current market purchase price - is Nil.

Market rates for different maturities of funds are usually different, with longer term rates usually - but not always - being higher.

A yield curve describes today’s market rates per annum on fixed rate funds for a series of otherwise comparable securities, having different maturities.

There are three ways of expressing today’s yield curve:
i. Zero coupon yield curve.
ii. Forward yield curve.
iii. Par yield curve.

If any one curve is known then each of the other two can be calculated by using no-arbitrage pricing assumptions.
The shape of today's yield curve is influenced by - but not entirely determined by - the market's expectations about future changes in market rates.

The yield curve is sometimes also known as the Term structure of interest rates.

The measure of yield on a bond from the current date until maturity that takes into account the capital gain on a bond trading at a discount, or the capital loss on a bond trading at a premium.
Also known as Yield to redemption, or Redemption yield.

Same as Yield to maturity.

Abbreviation for Yield to maturity.