Question: What is the major problem with bond index computation?
Answer: - Price: prices of the underline issues are not easily available. And that can be either trade’s bid price or matrix-based prices calculated using computer model. - Reinvestment: It depend when the cash-flow received is re-invested. It can be either immediately (aggressive approach) or conservatively (not-immediately) or not at all re-invested. And if invested then where it is re-invested and what rate should be considered if re-invested.
Question: Can you give some example of the firm who creates High Yield bond indexes?
Answer: Below are the few examples who have created High Yield Bond Indexes - Credit Suisse First Boston - Barclays Capital - Bank of America-Merrill Lynch - Morgan Stanley Smith Barney (MSSB).
Question: Gove some example of the firms creates Global Government Bond Market Indexes?
Answer: - J. P. Morgan - Barclays Capital - Bank of America-Merrill Lynch - Morgan Stanley Smith Barney.
Question: What do you mean by investment grade bond indexes?
Answer: It means underlying bond (which are tracked) in this index have small probability of the default. And the major factor influencing factor for return is aggregate interest-rate changes based on the Treasury yield-curve.