Bond

We conclude our lectures on ‘Duration’, before we move on to ‘Convexity’, with an explanation of ‘Modified Duration’ and its importance in predicting how individual bond prices will change on specific interest rate changes.

In passing, we cover the ‘MDURATION’ Excel function, and also dabble a little in different coupon payment frequencies, such as Annual, Semi-Annual (S/A), and Quarterly.

The full YouTube playlist of Securities Investment 101 lecture videos can be found by clicking here.

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In this lecture we discuss the importance of Macaulay’s Duration, particularly to anyone holding large bond portfolios. In passing, we show how and why zero coupon bonds have a duration identical to their maturities, and why the anticipated directional moves of interest rates are so critical to bond traders and pension fund managers.

We also introduce the Excel ‘PV’ (Present Value) function for pricing bonds.

The full YouTube playlist of Securities Investment 101 lecture videos can be found by clicking here.

Please read our disclaimer.

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Calculating Duration, Lecture 021, Securities Investment 101

November 25, 2013

Before we delve deeper into the mysteries of duration and convexity, now is a good opportunity to actually calculate duration, at least in its form as an average weighted cashflow period, known as Macaulay’s Duration. We do this both the long way, from first principles, and by using Excel’s built-in ‘DURATION’ command. Previous video, Securities […]

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Introducing Yield To Maturity, Lecture 012, Securities Investment 101

June 11, 2013

In this introductory lecture, we explain the conceptual framework behind ‘Yield To Maturity’ and why it is conceptually different from ‘Flat Yield’. In the next two lectures, we will further explore the ideas put forward in this lecture, and both price a bond, given a yield to maturity input, and calculate a yield to maturity, […]

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The Four Main Features of a Bond, Lecture 008, Securities Investment 101

June 1, 2013

In this lecture we discuss the four main features of a bond, which are the face value, the maturity or redemption date, the coupon rate, and the issuer name and associated risk rating. Many subsidiary topics pop up along the way, including lots of jargon terms used to describe bonds, the difference of the nature […]

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Course Introduction, Lecture 001, Securities Investment 101

May 24, 2013

This is the course introduction for the MithrilMoney training course, Securities Investment 101. The video explains who the course is intended for, the very raw basics of what a ‘security’ is, and what will be covered in the complete course. Next video, Types of Shares, Part I, Lecture 002 The full YouTube playlist of Securities […]

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