Concepts of Measurement

What this video covers

• Why current yield is only a snapshot of income return, and how the price-yield seesaw works in both directions
• How yield to maturity (YTM) incorporates capital gains or losses and time, and why YTM is king for non-callable discount bonds
• The exact yield ranking order for discount bonds at par and premium bonds, both callable and non-callable
• Why yield to call (YTC) becomes the highest yield for callable discount bonds and the lowest yield for callable premium bonds
• When and why a registered representative must quote the lower of YTM or YTC to a customer
• How total return differs from every yield measure by combining income and capital change into one comprehensive percentage
• What a basis point is, why 100 basis points equal exactly 1%, and how basis points remove ambiguity from percentage conversations