Negative interest rates and search for yield
"Can it be so that these low-interest rates cause investors to take greater risk to get a decent return?  With interest rates being as low as they are, there is little to no risk in banking; especially after Dodd-Frank. ""Risk"" is just a fancy word for ""Will I make money in the near/ long future."" No one knows what the actual risk is (unless you can see into the future.) But there are ways to mitigate it. So, arguably, the best way to make money is the stock market, not in banking.  There is a great misallocation of resources which at some point will show itself and cause tremendous losses, even maybe cause a new financial crisis? A financial crisis is backed on a believed-to-be strong investment that goes belly-up.  ""Tremendous Losses"" is a rather grand term with no merit. Banks are not purposely keeping interest rates low to cause a financial crisis.  As the central banks have kept interest rates extremely low for a decade, even negative, this affects how much we save and borrow. The biggest point here is to know one thing: bonds. Bonds affect all things from municipalities, construction, to pensions. If interest rates increased currently, the current rate of bonds would drop vastly and actually cause a financial crisis (in the U.S.) due to millions of older persons relying on bonds as sources of income."
Dividend yields are a product of the dollar amount paid to shareholders and the stock price. Dividends yields rise when a company is shunned by investors. It may be shunned because the earnings and/or dividend are at risk. Recent examples are SDRL and KMI. Most investors  would love an 8% yield so I would wonder why the stock is being ignored or shunned. A bond fund has a 5% yield. You can take 1/.05 and think of it as a 20 P/E.  I wouldn't, because no one else does, really. An individual bond has a coupon yield, and a YTM, yield to maturity. A bond fund or ETF usually won't have a maturity, only a yield. The spot curve (or yield curve) demonstrates the different yields at which bonds of differing maturities are being purchased. When the yield curve is upward sloping, longer maturity bonds are being purchased at higher yields. When it's downward sloping, longer maturity bonds are purchased at lower yields. Keep in mind that yield is inversely related to price, so that a high-yield bond will be at a lower price and vice versa. The spot curve can also be used to determine the forward curve. This is based on the concept that an investor, given two options with identical cash flows, will be indifferent in what to purchase (i.e. their prices should be equal).   To learn more about this, stay here in /r/finance. To learn anything about your actual question, try /r/personalfinance. Im creating a 5-year projection on Profit and loss, cash flow and balance sheet and i\m suppose to use the LIBOR (5 year forward curve) as interest rate on debt.  This is the information i am given and it in USD.  Thanks for the link.  I guess its the USD LIBOR today, in one year, in two years, three years, four years and five years "You are asking multiple questions here, pieces of which may have been addressed in other questions.  A bond (I'm using US Government bonds in this example, and making the 'zero risk of default' assumption) will be priced based on today's interest rate. This is true whether it's a 10% bond with 10 years left (say rates were 10% on the 30 yr bond 20 years ago) a 2% bond with 10 years, or a new 3% 10 year bond.  The rate I use above is the 'coupon' rate, i.e. the amount the bond will pay each year in interest. What's the same for each bond is called the ""Yield to Maturity."" The price adjusts, by the market, so the return over the next ten years is the same.  A bond fund simply contains a mix of bonds, but in aggregate, has a yield as well as a duration, the time-and-interest-weighted maturity.  When rates rise, the bond fund will drop in value based on this factor (duration). Does this begin to answer your question?" "You may be thinking about this the wrong way. The yield (Return) on your investment is effectively the market price paid to the investor for the amount of risk assumed for participating. Looking at the last few years, many including myself would have given their left arm for a so-called ""meager return"" instead of the devastation visited on our portfolios.  In essence, higher return almost always (arguably always) comes at the cost of increased risk.  You just have to decide your risk profile and investment goals.  For example, which of the following scenarios would you prefer? Investment Option A  Treasuries, CD's Worst Case: 1% gain Best Case 5% gain   Investment option B  Equities/Commodities Worst Case: 25% loss Best Case: 40% gain" "The CBOE states, in an investor's guide to Interest Rate Options: The Options’ Underlying Values   Underlying values for the option contracts are   10 times the underlying Treasury yields (rates)—   13-week T-bill yield (for IRX), 5-year T-note   yield (for FVX), 10-year T-note yield (for TNX)   and 30-year T-bond yield (for TYX). The Yahoo! rate listed is the actual Treasury yield; the Google Finance and CBOE rates reflect the 10 times value.  I don't think there's a specific advantage to ""being contrary"", more likely it's a mistake, or just different." I wrote one to check against the N3 to N6 bonds: http://capitalmind.in/2011/03/sbi-bond-yield-calculator/ Things to note: Right, I understand minority interest but it is typically reported as a positive under liabilities instead of a negative. For example, when you are calculating the enterprise value of a company, you add back in the minority interest.    Enterprise Value= Market Share +Pref Equity + Min Interest+ Total Debt - Cash and ST Equivalents.    EV is used to quantify the total price of a company's worth. If you have negative Min Interest on your books, that will make your EV less than it should be, creating an incorrect valuation.   This just doesn't make any sense to me. Does it mean that the subsidiary that they had a stake in had a negative earning? "Thanks!  Do you know how to calculate the coefficients from this part?:  ""The difference between the one-year rate and the spread coefficients represents the response to a change in the one-year rate. As a result, the coefficient on the one-year rate and the difference in the coefficients on the one-year rate and spread should be positive if community banks, on average, are asset sensitive and negative if they are liability sensitive. The coefficient on the spread should be positive because an increase in long-term rates should increase net interest income for both asset-sensitive and liability-sensitive banks.""  The one-year treasury yield is 1.38% and the ten-year rate is 2.30%.  I would greatly appreciate it if you have the time!" Those are the expected yields; they are not guaranteed. This was actually the bread and butter of Graham Newman, mispriced bonds.  Graham's writings in the Buffett recommended edition of Securities Analysis are invaluable to bond valuation. The highest yielder now is a private subsidiary of Société Générale.  A lack of financial statements availability and the fact that this is the US derivatives markets subsidiary are probably the cause of the higher rates. The cost is about a million USD to buy them. The rest will be similar cases, but Graham's approach could find a diamond; however, bonds are big ticket items, so one should expect to pay many hundreds of thousands of USD per trade. The MIRR formula uses the finance rate to discount negative cash flows, but since the only negative cash flow in the example in in the current period, there's nothing to discount.  It's meant to solve problems with IRR like when there are both positive and negative cash flows, which can result in multiple answers for IRR.  The example they give isn't a good one for MIRR because it's a simple spend now, earn later scenario, which IRR is perfectly fine for. If you add a negative cashflow somewhere after the first one you'll see the answer change with difference financing rates. The Vanguard Short-Term Bond Index mutual fund (VBIRX) might fit your need. Apart from 2008, it has only had one single quarter of negative returns, and has always had positive annual returns. If you're looking for an ETF, you might consider iShares Barclays 1-3 Year Credit Bond (CSJ). 1) Explicitly, how a company's share price in the secondary market affects the company's operations. (Simply: How does it matter to a company that its share price drops?) I have a vague idea of the answer, but I'd like to see someone cover it in detail.  2) Negative yield curves, or bonds/bills with negative yields  Thanks! http://www.scottrade.com/online-brokerage/interest-margin-rates.html  Rates fluctuate based upon the federal funds rate.