Research on the Influencing Factors Affecting Bond Yield

Abstract

With the appearance of more and more financial products, the significance of learning how to invest is widely known by the public. This paper aims to find the factors affecting bond yield, which is the rate of profit consumers can gain in the bond trading. In order to find the exact proportion between variables, multiple linear regression is used to create the relation equation. By creating a regression coefficient table and analysing the significance, the impact of interest rate and inflation rate on the bond yield is shown. Based on professional literature from scholarly journals, this paper found that the interest rate is directly proportional to the bond yield. In contrast, the inflation rate does not have an impact on bond yield. However, there still exist limitations in this paper, such as the lack of samples. Nevertheless, it reveals the phenomenon in some literature that their conclusions are overidealized and lack of data support. In addition, this paper also gives some insights for the public of investment strategies.