Definition

Yield equivalence

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Yield equivalence is important to municipal bond investors and is defined as the rate of interest on taxable security that would produce a return equivalent to the return of security which is tax-exempt, and vice versa. It is the yield a taxable investment would have to provide to equal the tax-free yield on a municipal bond.

Term of the day

Default Risk Premium

What is Default risk premium? Default risk premium refers to the additional return received by the lender from the borrower by assuming default risk. Default r......
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