Bonds and Interest Rates

Objectives

  • Understand interest rate risk premia
  • Calculate forward rates
  • Interpret the yield curve
  • Understand the bankruptcy process

Reading


Interest Rates

Why do Interest Rates Matter?

APR vs Effective Annual Rate

Calculate Effective Annual Rate

Yield to Maturity in Excel

Interest Rate Risk Premiums

Inflation

Default Risk

Interest Rate Risk / Maturity Risk

Liquidity Risk

Bonds

Intro to Bonds

The Yield Curve

Introduction

Understanding the Yield Curve

The Yield Curve @ Yale in 2009
00:00 - Defining Yield
09:07 - Assessing Market Interest Rate from Treasury Bonds
35:46 - Zero Coupon Bonds and the Principle of Duality
50:31 - Forward Interest Rate
70:05 - Calculating Prices in the Future and Conclusion

Bankruptcy

Forward Interest Rates

Forward Rate Explanation

Example

Optional Topics

Consumer Credit Reports @ Last Week Tonight

Consumer Debt Buyers @ Last Week Tonight

Previous
Next