Bond Valuation

 1. Identify all Cash Flows arising on: Date of Replacement During the life of Bond Date of maturity

Security analysis is the analysis of tradeable financial instruments called securities. It deals with finding the proper value of individual securities. Security Analysis involves a systematic analysis of the “Risk-Return” ...ReadMore

In finance, the dirty price is the price of a bond including any interest that has accrued since issue of the most recent coupon payment. This is to be compared ...ReadMore

Investment in bonds cannot be considered completely risk free. Such investment can have the following two types of risk: Interest Rate Risk Reinvestment Risk  1. Interest Rate Risk Such ...ReadMore

Convexity It is known that when interest rate expected by the investor (Desired Yield Rate) changes, the value of the bond will also change. The desired yield rate and bond ...ReadMore

Sensitivity of a Bond With Respect to Changes in Desired Yield Rate Interest rate sensitivity is a measure of how much the price of a fixed-income asset will fluctuate as ...ReadMore

Bond STRIPS STRIPS is an acronym for Separate Trading of Registered Interest and Principal of Securities.  The present value of cash flows from a bond can be divided into ...ReadMore

Yield to Maturity This is a rate of return which is generated by a bond over a period up to its maturity. If the future cash flows of interest and ...ReadMore

Bond Valuation SFM CA Final When a company has to raise long term debt, one of the modes of raising the funds is by issuing debentures. For all practical reasons, ...ReadMore