1 Debt Valuation Topic #2. 2 Context Complete Markets Bonds Time Value of Money Bond Valuation...
14
1 Debt Valuation Topic #2
-
Upload
margaret-moore -
Category
Documents
-
view
220 -
download
2
Transcript of 1 Debt Valuation Topic #2. 2 Context Complete Markets Bonds Time Value of Money Bond Valuation...
4
Moving cash in time
Compare cash only at the same point in time Future Value
Compounding Present Value
Discounting NPV
8
Bond Terminology
Maturity date Term Face value Coupons and coupon payments Zero-coupon bond Yield to Maturity
Risk-free interest rate Spot rates
Yield curve
9
Bond Valuation
Yield to Maturity of a Coupon Bond Price given YTM Time and bond prices Interest rate changes and bond prices
Interest rate sensitivity of bond prices Duration