ACCT 201 Lecture Notes - Lecture 11: Interest Rate Risk, Premium Bond, Zero-Coupon Bond
Document Summary
We continue to explore bond investing, with a focus on the valuation of bonds. We learn about the importance of the yield-to-maturity (or yield-to-call) calculation, in the valuation of bonds. We undertake a valuation of a bond using a financial calculator. We explore the concept of interest rate risk. Valuation the process that links risk and return to determine the worth of an asset amounts; (2) cash flows timing; and (3) certainty of receipt of cash flows (risk). This ignores the risk of the bond, however. 1 form (i. e. , shows up on your brokerage firm statement: current yield (or the marketplace yield, or the required return as indicated by the market) Readings and videos: please read section 6. (cid:885), (cid:498)valuation fundamentals. (cid:499) Valuation- process that links risk and return to determine worth of asset. Basic valuation model: knows the painting will sell for (money in the bank).
