What is the worst yield?

The worst yield is understood to be the yield of maturity of the bond problem if the worst set of circumstances has occurred. Since the lowest of all ripe projections, the proceeds to the worst make a number of different prerequisites and apply them to custody yield. This approach helps to demonstrate what factors could affect the return on binding negatively. In general, the prerequisites are presented as simple conditions of cause and consequences. For example, if no bond problem is associated with any preparation, it is likely that the market yield will be higher than the coupon. At the same time, the market return is expected to be under the coupon, it is assumed to be used.

Since the worst yield is the lowest possible offer for yield, the calculation is an important point of view when considering the bond problem. A look at what could have an impact on the value of the investment, allowing different types of complications to help the investor have a better idea of ​​what type of reduced return can occur. ThisThe accession can help a potential investor consider a bond in a wider context, not only at best.

At the same time, the yield should not be devoted to an unusual assessment. In most cases, the yield is not the worst of the worst way to see the investment. Although the strategy is useful in examining all possible scenarios associated with the bond problem, the results of these predictions should be balanced with the assumption that the final yield of the bond problem will be more in line with the original projections presented and institutions.