Influence of the Coupon Rate and Maturity Period of Coupon Obligation on its Theoretical Price at the Change of Interest Rate on the Capital Market Cover Image

Vplyv doby splatnosti a kupónovej sadzby obligácie na zmenu jej teoretickej ceny pri zmene úrokovej sadzby na kapitálovom trhu
Influence of the Coupon Rate and Maturity Period of Coupon Obligation on its Theoretical Price at the Change of Interest Rate on the Capital Market

Author(s): Vincent Soltes
Subject(s): Economy
Published by: Ekonomický ústav SAV a Prognostický ústav SAV
Keywords: coupon rate; duration; price sensibility; maturity period

Summary/Abstract: This paper deals with the influence of coupon rate and maturity period of coupon obligation on its theoretical price alteration at the variation of interest rate on the capital market. It is proved, that the lower coupon rate is, the more sensitive on the variation of interest rate on the capital market the obligation is. On the other hand, it is shown, that the statement which says that the higher mature period is, the more sensitive on the variation of interest rate on the capital market the obligation is, is not generally valid. In theory, there are some obligations, for which this statement is not valid and there are examples of such obligations in this paper. There is also the condition found, under which the statement is valid. It can be seen, that obligations for which the statement is not valid, can not be found in practice, so it can be used in practical investment.

  • Issue Year: 52/2004
  • Issue No: 06
  • Page Range: 755-761
  • Page Count: 6
  • Language: Slovak