Calculate Bond issue Price. Simply Explained. Essentials of Investments Course. CPA Exam BAR
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4 سال پیش
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In this video, I discuss
In this video, I discuss how to Calculate Bond issue Price. To Calculate Bond issue Price find the present value of the coupon payments and the present value of the face value.
✔️Accounting students and CPA Exam candidates, check my website for additional resources: https://farhatlectures.com/
📧Connect with me on social media: https://linktr.ee/farhatlectures
#CPAEXAM #bondpricing #cpareview
KEY TAKEAWAYS
Bond prices are intrinsically linked to the interest rate environment in which they trade - with prices falling as interest rates rise.
Bond prices are also greatly influenced by the creditworthiness of the issuer, from the federal government down to a junk bond issuer on the verge of default.
Bond prices and yields can be calculated in several different ways, depending on the type of bond and the definition of yield you're using.
Benchmarks exist to track bond yields and serve as a relative measure of price performance.
Bond Market Classifications
The bond market consists of a great number of issuers and types of securities. To talk about each specific type might fill an entire textbook; therefore, for the purposes of discussing how various bond market pricing conventions work, we make the following major bond classifications:
U.S. Treasuries: bonds issued by the United States Department of the Treasury
Corporate Bonds: bonds issued by corporations that carry an investment-grade rating
High-Yield Bonds: bonds with ratings below investment grade – also known as non-investment grade bonds or junk bonds
Mortgage-Backed Securities (MBS): a bond collateralized by the cash flows of principal and interest payments from an underlying pool of single-family residential mortgages
Asset-Backed Securities (ABS): a bond collateralized by the cash flows of an underlying pool of assets such as auto loans, credit card receivables, home equity loans, aircraft leases, etc. The list of assets that have been securitized into ABSs is almost endless.
Agency Bonds: debt issued by the government-sponsored enterprises (GSEs), including Fannie Mae, Freddie Mac, and the Federal Home Loan Banks
Municipal Bonds (Munis): a bond issued by a state, city or local government or its agencies
Collateralized Debt Obligations (CDOs): a type of asset-backed security backed by any one or several other ABS, MBS, bonds or loans
✔️Accounting students and CPA Exam candidates, check my website for additional resources: https://farhatlectures.com/
📧Connect with me on social media: https://linktr.ee/farhatlectures
#CPAEXAM #bondpricing #cpareview
KEY TAKEAWAYS
Bond prices are intrinsically linked to the interest rate environment in which they trade - with prices falling as interest rates rise.
Bond prices are also greatly influenced by the creditworthiness of the issuer, from the federal government down to a junk bond issuer on the verge of default.
Bond prices and yields can be calculated in several different ways, depending on the type of bond and the definition of yield you're using.
Benchmarks exist to track bond yields and serve as a relative measure of price performance.
Bond Market Classifications
The bond market consists of a great number of issuers and types of securities. To talk about each specific type might fill an entire textbook; therefore, for the purposes of discussing how various bond market pricing conventions work, we make the following major bond classifications:
U.S. Treasuries: bonds issued by the United States Department of the Treasury
Corporate Bonds: bonds issued by corporations that carry an investment-grade rating
High-Yield Bonds: bonds with ratings below investment grade – also known as non-investment grade bonds or junk bonds
Mortgage-Backed Securities (MBS): a bond collateralized by the cash flows of principal and interest payments from an underlying pool of single-family residential mortgages
Asset-Backed Securities (ABS): a bond collateralized by the cash flows of an underlying pool of assets such as auto loans, credit card receivables, home equity loans, aircraft leases, etc. The list of assets that have been securitized into ABSs is almost endless.
Agency Bonds: debt issued by the government-sponsored enterprises (GSEs), including Fannie Mae, Freddie Mac, and the Federal Home Loan Banks
Municipal Bonds (Munis): a bond issued by a state, city or local government or its agencies
Collateralized Debt Obligations (CDOs): a type of asset-backed security backed by any one or several other ABS, MBS, bonds or loans
4 سال پیش
در تاریخ 1399/06/22 منتشر شده
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