emlyn ngwiri wrote:@scooby i tend to differ on the issue of duration, Bonds with high coupon rates and, in turn, high yields will tend to have lower durations than bonds that pay low coupon rates or offer low yields. This makes empirical sense, because when a bond pays a higher coupon rate or has a high yield, the holder of the security receives repayment for the security at a faster rate.
in essence,the issue of yields does affect the term structue otherwise the cbk would not be interested in graphing the yield curve would they?
@emlyn. I find this statement interesting. Using the logical above, how would the yield curve look if a bond with a higher coupon rate (high yield) has a lower duration? I'm also doing some research on this, do you have an online source you could share with me that could explain the above statement? Thanks.
@scooby. The profile of most bond portfolios for banks haven't changed expect perhaps for CFC, NIC and DTBK who have more bonds under held-for-sale & available-for-sale. In the cfc annual report a bulk of the government securities were tradable and it reflects in the non interest income.
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