Comparison of government bond yields in the third quarter of 2021:

The 36-month coupon rate of the electronic government bond issued on May 10, 2021 is 3.8%;

The electronic treasury bonds issued on July 10, 2021, have a 36-month coupon rate of 3.4%.

So judging from the yields on government bonds issued in the past, the annualized yield on buying government bonds is generally between 3% and 4.5%.

For example: An investor purchases a 100,000 yuan treasury bond. If the coupon rate is 3% for three years, then there will be an income of 3,000 yuan per year, and an income of 9,000 yuan in three years. Therefore, the yield on Treasury bonds depends on the coupon rate at the time of issuance and the holding period. Generally, 5-year Treasury bonds have higher yields because they last longer.

Compared with bank time deposits and large-denomination certificates of deposit, the yields on treasury bonds are relatively high. When the interest rates on some large-denomination certificates of deposits rise, the yields may be the same as those on treasury bonds, but for large-denomination The starting amount for deposit certificates is at least 200,000 yuan, while the starting amount for electronic treasury bonds is only 100 yuan.

Treasury bond yield refers to the ratio of the income earned from investing in Treasury bonds, a marketable security, to the total investment amount each year. The rate calculated over one year is the annual rate of return. Bond yields are usually expressed in terms of annual yield "%".

The yield curve is for treasury bond analysis just like the K-line chart is for stock analysis. It seems simple and intuitive, but it contains infinite mysteries. With the continuous development of international financial innovation since the 1970s, the importance of the yield curve has gone far beyond the field of national debt analysis and has become one of the cornerstones of the entire financial analysis.

So what is the yield curve? Let's first review the concept of yield. In order to judge whether an investment is worth making, people have come up with many methods. One of the most commonly used methods is to calculate the rate of return, which is the return on investment as a percentage of the total investment within a certain period of time.

Direct return

The calculation of direct return is very straightforward. Just divide the annual interest by the market price of the government bond, that is, i=C/P0.

Yield to maturity

Yield to maturity refers to the rate of return that enables the sum of the present values ??of future cash flows of government bonds to equal the market price. Yield to maturity is one of the most important yield indicators. There are several important assumptions in calculating the yield to maturity of treasury bonds: (1) The treasury bonds are held until maturity; (2) The interest income is reinvested and the investment yield is equal to the yield to maturity.

The calculation formula of yield to maturity is:

V=C1/(1+i)+C2/(1+i)^2+?+Cn/(1+ i) ^n + Mn / (1 + i) ^n

The calculation of the yield to maturity is more complicated. You can use computer software or contain the yield to maturity under different prices, interest rates, and repayment periods. The bond rate is obtained from the bond table. In the absence of the above tools, the yield to maturity can only be obtained by interpolation.

For example: the market price of 696 Treasury Bonds on June 14, 2000 was 142.15 yuan, and the outstanding period was 6 years, then the yield to maturity can be calculated as follows:

142.15=11.83 /(1+i)+11.83/(1+i)^2+11.83/(1+i)^3+11.83/(1+i)^4

+11.83/(1+i )^5+11.83/(1+i)^6+100/(1+i)^6 (1)

Using the interpolation method, first assuming i=4%, then (1) The right side is:

V1=11.83/(1+0.04)+11.83/(1+0.04)^2+11.83/(1+0.04)^3+11.83/(1+0.04)^4+ 11.83/ (1+0.04)^5+11.83/ (1+0.04)^6+100/ (1+0.04)^6=141.05 means that the yield to maturity is less than 4%, and assuming i=3%, then (1 ) The right side of the formula is:

V2=11.83/(1+0.03)+11.83/(1+0.03)^2+11.83/(1+0.03)^3+11.83/(1+0.03)^ 4+11.83/ (1+0.03)^5+11.83/ (1+0.03)^6+100/ (1+0.03)^6=147.83>142.15

Indicates that the yield to maturity is between 3 Between %-4%, using interpolation method, the yield to maturity can be calculated:

(4%-i)/(4%-3%)=(141.05-142.15)/(141.05 -147.83) can be found to be i=3.84%.