Dear guys,
I read these conclusions from and a bit confused. Please help me to be clear. Thank you.
- If the market YTM for the bond, our assumed reinvestment rates, increases after the bond is purchased but before the first coupon date, a bind investor eill earn a rate of return that is lower than the YTM at bond purchase if thr bond is held for a short period
- If the mkt YTM for the bond, our our assumed reinvestment rates, decreases after the bond is purchased but before the first coupon date, a bind investor eill earn a rate of return that is lower than the YTM at bond purchase if thr bond is held for a long period.