Copyright © 2002. All Worldwide Rights Reserved. Do not reproduce without explicit permission.
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2002 Pulitzer Prize winner for financial writing,
Gretchen Morgenson of the New York Times.
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Fifth letter of a Nasdaq stock symbol specifying that it is an ADR
- The two-character ISO 3166 country code for YEMEN.
- The ISO 4217 currency code for the Yemen Rial.
- The two-character ISO 3166 country code for MAYOTTE.
- The two-character ISO 3166 country code for YUGOSLAVIA.
- The ISO 4217 currency code for the Yugoslavia New Dinar.
- Yankee bonds
- Foreign bonds denominated in U.S. dollars and issued in the United States by foreign banks and corporations. These bonds are usually registered with the SEC. Such as, bonds issued by originators with roots in Japan are called Samurai bonds.
- Yankee CD
- A CD issued in the domestic market, typically New York, by a branch of a foreign bank.
- Yankee market
- The foreign market in the United States.
- Slang for one billion currency units. Used particularly in currency trading, e.g., for Japanese yen since one billion yen equals approximately US$10 million. It is clearer to say, "I'm a buyer of a yard of yen," than to say, "I'm a buyer of a billion yen," which could be misheard as "I'm a buyer of a million yen."
- Year-end dividend
- A special dividend declared at the end of a fiscal year that usually represents distribution of higher-than-expected company profits.
- Year-to-date (YTD)
- The period beginning at the start of the calendar year up to the current date.
- Yellow sheets
- Sheets published by the National Quotation Bureau that detail bid and ask prices, plus those firms that are making a market in over-the-counter corporate bonds.
- Yen bond
- Any bond denominated in Japanese yen currency.
- The percentage rate of return paid on a stock in the form of dividends, or the effective rate of interest paid on a bond or note.
- Yield advantage
- The advantage gained by purchasing convertible securities instead of common stock, which equals the difference between the rates of return of the convertible security and the common shares.
- Yield burning
- A municipal bond financing method.
Underwriters in advance refundings add
large markups on US Treasury bonds bought and held in escrow to compensate
investors while waiting for repayment of
old bonds after issuance of the new bonds.
Since bond prices and yields move in opposite
directions, when the bonds are marked up, they
"burn down" the yield, which may
violate federal tax rules and diminishes tax revenues.
- Yield curb
- Applies mainly to convertible securities. Difference in current yield between the convertible and the underlying common.
- Yield curve
- The graphic depiction of the relationship between the yield
on bonds of the same credit quality but different
maturities. Related: Term
structure of interest rates. Harvey
(1991) finds that the inversions of the yield curve (short-term rates greater
than long term rates) have preceded the last five US recessions. The yield
curve can accurately forecast the turning points of the business cycle.
- Yield curve
- Models that can incorporate different volatility assumptions along the yield curve, such as the Black-Derman-Toy model. Also called arbitrage-free option-pricing models.
- Yield curve strategies
- Investments that position a portfolio to capitalize on expected changes in the shape of the Treasury yield curve.
- Yield differential/pickup
- Mainly applies to convertible securities. Graph showing the term structure of interest rates by plotting the yield of all bonds of the same quality with maturities ranging from the shortest to the longest available.
- Yield equivalence
- The interest rate at which a tax-exempt bond and a taxable security of similar quality give the investor the same rate of return.
- Yield ratio
- The quotient of two bond yields.
- Yield spread
- The difference in yield between different security issues usually securities of different credit quality.
- Yield spread strategies
- Investments that position a
portfolio to capitalize on expected changes in yield spreads between sectors of the bond market.
- Yield to average life
- A yield calculation in which bonds are retired routinely during the life of the issue. Since the issuer buys its own bonds on the open market because of sinking fund requirements, if the bonds are trading below par, this action provides automatic price support for these bonds and they will usually trade on a yield to average life basis.
- Yield to call
- The percentage rate of a bond or note if the investor buys and holds the security until the call date. This yield is valid only if the security is called prior to maturity. Generally bonds are callable over several years and normally are called at a slight premium. The calculation of yield to call is based on coupon rate, length of time to call, and market price.
- Yield to maturity
- The percentage rate of return paid on a bond, note, or other fixed income security if the investor buys and holds it to its maturity date. The calculation for YTM is based on the coupon rate, length of time to maturity, and market price. It assumes that coupon interest paid over the life of the bond will be reinvested at the same rate.
- Yield to warrant call
- Applies mainly to convertible securities. Effective yield of usable or synthetic convertible bonds determined against the first date at which the warrants can be called.
- Yield to warrant expiration
- Applies mainly to convertible securities. Effective yield of usable convertible bonds determined by the expiration date of the applicable warrants.
- Yield to worst
- The bond yield computed by using the lower of either the yield to maturity or the yield to call on every possible call date.
- Yo-yo stock
- A highly volatile stock that moves up and down like a yo-yo.
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Copyright © 2002, Campbell R. Harvey. All Worldwide Rights Reserved. Do not reproduce without explicit permission.
[Version October 15, 2002.]
Order the popular hard copy version coauthored with the 2002 Pulitzer Prize winner for financial writing, Gretchen Morgenson of the New York Times.
Order via Amazon
Order via Barnes and Noble