Course DescriptionA zoom-in, zoom-out, connect-the-dots tour of Bond Theory and ValuationLet’s parse that’connect the dots’:Bonds is an relatively safe investments instrument with steady stream of income. The various attributes of bonds can make it conceptually complex - the various bond options just add on to the complexities. This course makes sure the concepts are made crystal clear.‘zoom in’:Getting the details is very important in bond valuation - All attributes influence each other in some way or the other. This course gets the details right where they are important.‘zoom out’:Details are important, but not always. This course knows when to switch to the big picture. What’s Covered: Credits: Explained with example what credit is, why is it needed, the borrowers and the lenders. The issuers of Bond: Why are bonds issued, the credit ratings and their importanceAttributes of Bond: Grilling down the Bond Certificate to get to the specifics of bonds: Coupon Rates, Principal, Maturity, Duration. Yield Curve: Explanation of what Yield curve represents, the factors that impact the yield, discounting and Yield computationBond Risks: Interest rate risks, reinvestment risk, liquidity riskBond Options: Examples relating to put and call options, interest floor optionsDuration: Modified Duration, Macauley DurationConvexity: Derivation of Convexity, how it eliminates error margin
