What is a 5 year bond?

When a 5-year bond is purchased, the buyer will receive interest each year for 5 years on the face value, which is the money they have “loaned” to the government. This is part of what determines the bond’s yield. Since yield is the bond’s return, it can either be calculated with the simple coupon yield or the yield to maturity (YTM).

What is a 5-year government of Canada bond yield?

The 5-year Government of Canada bond yield is the annual return on the bond if held until maturity. This includes the interest or coupon rates and the return from bond market price changes. The auction process determines the yield, where investors bid on these bonds.

How long do government bonds last in Canada?

The government bonds are issued with maturities ranging from 2 to 30 years. The 5-Year Government of Canada bond yield is particularly important for homeowners, as 5-year fixed-rate mortgages follow the bond yield.

What is the return on a GOC bond in 2023?

As of September 18, 2023, 1 Year, 2 Year, 3 Year, 5 year, 7 year and 10 year, GoC bonds were respectively 5.05%, 4.73%, 4.38%, 3.98%, 3.84% and 3.76%. Suppose we assume that an investor would be indifferent between receiving a certain return from a longer-term bond or two shorter-term bonds purchased successively.