bonds

In this lecture we explain what a convertible bond is, why they are issued, who issues them, how generally speculative they are, and what the terms are about used to describe them. These terms include conversion ratio, conversion value, conversion percentage, conversion premium, and so on.

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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.

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

Please read our disclaimer.

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Pricing a Bond with Yield To Maturity, Lecture 013, Securities Investment 101

June 14, 2013

In this lecture, we price the same standard bond given three different ratings agency ratings, which has given us three different required overall yields to get from the bond, given the changing levels of risk. After explaining the theory of present valuing the different fixed cashflows, we then use an Excel spreadsheet to calculate the […]

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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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Types of Shares, Part I, Lecture 002, Securities Investment 101

May 25, 2013

Continuing our MithrilMoney training course, Securities Investment 101, this video explores the different features and types of shares. We discuss the basic legal and investment differences between bond and share securities, the difference between registered securities and bearer securities, and the main difference between ordinary shares and preference shares (mentioning redeemable shares along the way), […]

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