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PrivateBanker.ro Interest Rates and Bond Valuation
Key Concepts and Skills ,[object Object],[object Object],[object Object],[object Object],[object Object]
Outline ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Bond Definitions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Present Value of Cash Flows as Rates Change ,[object Object],[object Object],[object Object],[object Object]
Valuing a Discount Bond with Annual Coupons ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Valuing a Premium Bond with Annual Coupons ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Graphical Relationship Between Price and Yield-to-maturity Bond Price Yield-to-maturity
Bond Prices: Relationship Between Coupon and Yield ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
The Bond-Pricing Equation
Example ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Coupon rate= 14%, semiannual coupons, YTM=16%  Maturity= 7 years Par value=1000$
Interest Rate Risk ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Exemple
Computing Yield-to-maturity ,[object Object],[object Object],[object Object]
YTM with Annual Coupons ,[object Object],[object Object],[object Object],[object Object]
YTM with Semiannual Coupons ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Current Yield vs. Yield to Maturity ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Bond Pricing Theorems ,[object Object],[object Object],[object Object]
Bond Prices with a Spreadsheet ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Differences Between Debt and Equity ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
The Bond Indenture ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Bond Classifications ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Bond Characteristics and Required Returns ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Bond Ratings – Investment Quality ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Bond Ratings - Speculative ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Zero-Coupon Bonds ,[object Object],[object Object],[object Object],[object Object],[object Object]
Floating Rate Bonds ,[object Object],[object Object],[object Object],[object Object],[object Object]
Other Bond Types ,[object Object],[object Object],[object Object],[object Object],[object Object]
Other Bond Types ,[object Object],[object Object]
Other Bond Types ,[object Object],[object Object]
Other Bond Types ,[object Object],[object Object],[object Object],[object Object]
Bond Markets ,[object Object],[object Object],[object Object],[object Object]
Inflation and Interest Rates ,[object Object],[object Object],[object Object]
The Fisher Effect ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Example: Fisher Effect ,[object Object],[object Object],[object Object],[object Object]
Term Structure of Interest Rates ,[object Object],[object Object],[object Object],[object Object],[object Object]
Upward-Sloping Yield Curve
Downward-Sloping Yield Curve
Factors Affecting Required Return ,[object Object],[object Object],[object Object],[object Object]
Recapitulations questions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

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Bond valuation