Guilt Edged Stocks

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Could someone please explain to me the difference between interest (flat) yield and redemption yield on gilts? I understand how to calculate the interest yield but do you only get this rate if you redeem your gilts before the maturity date or do have to keep you investment until maturity to get anything back at all? <BR><BR>Any help would be much appreciated. Thanks

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Guilt Edged Stocks

    I think you calculate the interest yield if you expect to keep the yield for 1 year or short term (i.e. you would not keep until maturity and are only interested on the amount of interest you would receive on the gilt compared to other investments for the period). The redemption rate is calculated to give an estimate of the total return you would get on the gilt if you keep it until maturity, it includes factors like inflation etc. and you use it if you intend to keep until maturity.<BR><BR>Don't know if this is what you wanted to know but I hope it helps.

Categories

Privacy Policy