How bond yield works It is important to understand the relationship between bond price and yield, which are inversely correlated. As Tim Bain, president and chief investment officer at Spark Asset ...

When investing in bonds, it's crucial to consider credit ratings, which indicate the issuer's ability to repay debt; interest rates, since they affect bond prices and yield; and maturity dates ...

Note that a bond fund’s yield ... share price will move up or down in response to changes in interest rates. Some bonds, such as municipal, mortgage and certain corporate bonds, are callable ...

While the statistic calculates a linear relationship between price and yield changes in bonds ... typically occurs in the context of callable bonds where the issuer has the option of early ...

However, you must also keep in mind how this return translates to yield. Yield is a measure of these interest payments received relative to the price ... bonds), call risk (for callable bonds ...

The lower the credit rating, the higher is the average yield on ... right to call the bond and the price at which that option is initially exercisable are shown for the two callable bonds.

Experts recommend spreading investments across different bond types, sectors and credit ratings to reduce risk ...