1. Notes: How Reinvestment Rates Affect Realized Return.
- Author
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Gup, Benton E.
- Subjects
INTEREST rates ,RATE of return ,BOND ratings ,INVESTMENTS ,DIVIDEND reinvestment ,RECAPITALIZATION ,REINVESTMENT ,REVENUE management ,RATIO analysis ,INVESTMENT analysis ,ACCOUNTING - Abstract
In recent years, the level of interest rates changed dramatically. During this period many investors who bought bonds with, say, a coupon believed that they would realize a; 9 percent return on their investment-not knowing that they can only attain a 9 percent rate of return if the cash flows from the bonds are reinvested at 9 percent. This article discusses the effects of reinvestment rates on the income derived from a bond. [ABSTRACT FROM AUTHOR]
- Published
- 1974
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