The Critical Study on US and EU Yield to Maturity: Preliminary Results

This paper analyzes the factors that contribute to the government obligations yield to maturity at the current period of time on the EU and US markets. Both, the bond characteristics and macroeconomic factors are taken into account, and the magnitude of each of the factor is provided which compose the average yield to maturity. Due to a severe financial crisis in the past years, economies are still recovering from the effects what makes investors look for stable investment instruments. Many studies that are available, are focused on the corporate bonds or equity investments, but not on the government debt instrument. Results of this study is a good fundamental for private investors that desire a stable return with low-risk exposure. The factors and obtained coefficients included in the paper can be used by investors, both private and institutional, to understand the magnitudes of the premiums that they can take on by varying the bond characteristics which account to the bond yield to maturity. Investors can decide at which premiums they are willing to focus, to уobtain the desired expected returns.