The reinvestment rate is the return that an investor expects to receive after reinvesting cash flows received from previous investments.
The reinvestment rate is expressed as a percentage and represents the amount of interest that can be received on investments with a fixed income.
Reinvestment rates can be adversely affected by interest rate risk, which is the possibility of investment losses as a result of changes in interest rates.
Reinvestment rates can also be affected by reinvestment risk, which is the potential for an investor to be unable to reinvest cash flows at a rate comparable to their current rate of return.
Average life is the average length of time it takes to pay off the outstanding principal on a debt instrument, such as a treasury bill, bond, loan, or mortgage-backed security.
Hard call protection or absolute call protection is a condition of a callable bond, according to which the issuer cannot exercise the call and redeem the bond before a specified date, usually three to five years from the date of issue.
A harmless warrant is a provision that requires the holder of a bond to return the bond to the issuer if he buys another bond with similar terms from the same issuer.
The high yield bond spread, also known as the credit spread, is the difference between the yield on a high yield bond and a benchmark bond such as an investment grade or treasury bond.
Japanese government bonds (JGB) are bonds issued by the Japanese government that have become a key element in the country’s central bank’s efforts to boost inflation.