Learn about the various shifts observed in the yield curve explained with the help of suitable diagrams. Direction of the Yield Curve: A yield curve can have 3 broad directions: 1. Upward Sloping: This is the most common and 'normal' direction of the yield curve. Its interpretation is that bonds with longer maturities have higher yields than those with shorter [...]
The following points highlight the seven main types of risk on investment. The types are: 1. Interest Rate Risk / Market Risk 2. Credit Risk / Counter-Party Risk 3. Call Risk / Prepayment Risk 4. Put Risk 5. Yield Curve Risk 6. Inflation Risk 7. Sovereign Risk. 1. Interest Rate Risk / Market Risk: If we talk of fixed income [...]
In this article we will discuss about the benefits of having a diversified investment portfolio. Yearly Returns from Each Investment Avenue: Let us first consider the returns that you would have earned each year during the period from 2000 to 2010 from four main investment avenues- Equity, Fixed Income, Commodities and Gold. For the purpose of measuring returns from each [...]