PPT-Current Bond Yield =

Annual Income Current Market Price Annual Income Annual Interest Capital Gain Per Year Annual Income Annual Interest Capital Loss Per Year Current yield represents the return an investor would expect if the owner purchased the bond and held it for a year but current yield is not the actual return an investor receives if he holds a bond until maturity. ROBERT PARRINO, PH.D.. DAVID S. KIDWELL, PH.D.. THOMAS W. BATES, PH.D.. Bond Valuation and the Structure of Interest Rates. Learning Objectives. Describe the market for corporate bonds and three types of corporate bonds.. Timothy R. Mayes, Ph.D.. FIN 4600: Chapter 12. Information Required. To value a bond, we need to understand the cash flows that it promises to provide. . Therefore we need:. Face (or Par) Value. Callability. COMPLIANCE. BY. Arbitrage . Compliance Specialists, Inc. (“ACS”). Robert Goubert, Vice President. 800-672-9993 ext. 7536. Robert@RebatebyACS.com. . Stephen H. Broden, . Vice President. 800-672-9993 ext. . M. arket Instruments. 19: Corporate Bonds . Corporate Bonds. Risk Structures. Convertibles. Risk Structures. Promised Yield to Maturity. Not all bonds pay as promised.. Enron filed for bankruptcy. December 2, 2001. Bond . Cash Flows, Prices, . and Yields. Bond Terminology. Face Value. Notional amount used to compute the interest payments. Coupon Rate. Determines the amount of each coupon payment, expressed as an . Bond Basics. The problem large organizations run into is that they typically need far more money than the average bank can provide.. . The solution is to raise money by issuing bonds (or other debt instruments) to a . MGT 531. Lecture #27. Investment and portfolio management. MGT 531. The course assumes little prior applied knowledge in the area of finance.. References. Kristina (2010) . ‘Investment Analysis and Portfolio Management’.. flat . descending (or inverted). ascending (includes steep and normal) . humped. 2. Definitions. Term structure of interest rates. : relationship . between the yields on bonds and their terms to maturity.. By. Cheng Few Lee. Joseph . Finnerty. John Lee. Alice C Lee. Donald . Wort. Outline. 23.1 Bond Strategies. 23.1.1 Riding The Yield Curve. 23.1.2 Maturity-structure Strategies. 23.1.3 Swapping. 23.2 Duration. By. Cheng Few Lee. Joseph . Finnerty. John Lee. Alice C Lee. Donald . Wort. Outline. 23.1 Bond Strategies. 23.1.1 Riding The Yield Curve. 23.1.2 Maturity-structure Strategies. 23.1.3 Swapping. 23.2 Duration. When a corporation or government wishes to borrow money from public, it usually does so by issuing, or selling bonds. When investors buy a bond, they lend money to the bond issuer, the government or corporation. Bonds. Fundamentals of Financial Services. Key Topic Areas. Introduction to Bonds. Bond Issuers. Features of Bonds. Bond Terminology. Advantages/Disadvantages of investing in Bonds. Credit Rating Agencies. The problem large organizations run into is that they typically need far more money than the average bank can provide.. . The solution is to raise money by issuing bonds (or other debt instruments) to a . The Fundamentals of Bond Valuation. The Present Value . Model. . where:. . P. m. =the current market price of the bond. n. = the number of years to maturity. . C. i. . = the annual coupon payment for bond .