theoretical yield

Examples of theoretical yield in the following topics:

• Calculating Theoretical and Percent Yield

  • It is the ratio between the actual yield and the theoretical yield.
  • This number can be calculated and is called the theoretical yield.
  • To evaluate the efficiency of the reaction, chemists compare the theoretical and actual yields by calculating the percent yield of a reaction:
  • Then the theoretical yield of the product can be determined and, finally, compared to the actual yield.
  • Calculate the percent yield of a reaction, distinguishing from theoretical and actual yield.

• Present Value of Payments

  • As with any security or capital investment, the theoretical fair value of a bond is the present value of the stream of cash flows it is expected to generate.
  • F = face value, iF = contractual interest rate, C = F * iF = coupon payment (periodic interest payment), N = number of payments, i = market interest rate, or required yield, or observed / appropriate yield to maturity, M = value at maturity, usually equals face value, and P = market price of bond.

• Quantitative or Qualitative Data?

  • The researcher analyzes the data with the help of statistics and hopes the numbers will yield an unbiased result that can be generalized to some larger population.
  • The chi-square test tests a null hypothesis stating that the frequency distribution of certain events observed in a sample is consistent with a particular theoretical distribution.
  • A test of goodness of fit establishes whether or not an observed frequency distribution differs from a theoretical distribution, and a test of independence assesses whether paired observations on two variables, expressed in a contingency table, are independent of each other (e.g., polling responses from people of different nationalities to see if one's nationality is related to the response).

• Demand-Based Pricing

  • Yield management is the process of understanding, anticipating and influencing consumer behavior.
  • Yield management can result in price discrimination.
  • It is a temporal version of price discrimination/yield management.
  • If this is done successfully, then theoretically no customer will pay less for the product than the maximum they are willing to pay.
  • Yield management is the process of understanding, anticipating and influencing consumer behavior in order to maximize yield or profits from a fixed, perishable resource, such as airline seats or hotel room reservations.

• Discounted Dividend vs. Corporate Valuation

  • Gordon who originally published it in 1959, although the theoretical underpin was provided by John Burr Williams in his 1938 text The Theory of Investment Value.
  • The equation can also be understood to generate the value of a stock such that the sum of its dividend yield (income) plus its growth (capital gains) equals the investor's required total return.

• Defining the Security Market Line

  • Recall that the risk-free interest rate is the theoretical rate of return of an investment with no risk of financial loss.
  • The assets that lie above the line are undervalued because for a given amount of risk, they yield a higher return.
  • The assets below the line are overvalued because for a given amount of risk, they yield a lower return.

• Structure of the Chi-Squared Test

  • The chi-square test is used to determine if a distribution of observed frequencies differs from the theoretical expected frequencies.
  • The chi-square ($\chi^2$) test is a nonparametric statistical technique used to determine if a distribution of observed frequencies differs from the theoretical expected frequencies.
  • If a chi squared test is conducted on a sample with a smaller size, then the chi squared test will yield an inaccurate inference.

• Yield to Maturity

  • The formula for yield to maturity:
  • Yield to put: same as yield to call, but when the bond holder has the option to sell the bond back to the issuer at a fixed price on specified date.
  • Yield to worst: when a bond is callable, puttable, exchangeable, or has other features, the yield to worst is the lowest yield of yield to maturity, yield to call, yield to put, and others.
  • The current yield is 5.56% ((5/90)*100).
  • Classify a bond based on its market value and Yield to Maturity

• The Yield Curve

  • Based on the shape of the yield curve, we have normal yield curves, steep yield curves, flat or humped yield curves, and inverted yield curves .
  • The yield curve is normal meaning that yields rise as maturity lengthens (i.e., the slope of the yield curve is positive).
  • Sometimes, treasury bond yield averages higher than that of treasury bills (e.g. 20-year Treasury yield rises higher than the three-month Treasury yield).
  • An inverted yield curve occurs when long-term yields fall below short-term yields.
  • Because of the term premium, long-term bond yields tend to be higher than short-term yields, and the yield curve slopes upward.

• Experimental Probabilities

  • Experimental probability contrasts theoretical probability, which is what we would expect to happen.
  • If we conduct a greater number of trials, it often happens that the experimental probability becomes closer to the theoretical probability.
  • If a trial yields more information, the empirical probability can be improved on by adopting further assumptions in the form of a statistical model: if such a model is fitted, it can be used to estimate the probability of the specified event.