How to Value the Price of Bonds (Financial Mathematics Lesson 21)
➡️ Download My Free Worksheet Set: [ Ссылка ]
🖥️ Join My Membership Site: [ Ссылка ]
In this lesson we learn about bonds and how to calculate their price given its components of its face value, redemption value, coupon rate, and its yield rate. We discuss what each of these components are and their importance to the calculation of a bond’s price.
Bonds are similar to loans in that they are a way to borrow money. Essentially, a bond is a debt that typically requires periodic payments known as “coupons” for a stated term, as well as a one time payment of the amount borrowed at the end of the term issued. We use this definition of a bond to derive its price formula, which is the present value of the coupon payments plus the redemption value. We look at one example problem and discuss what it means to purchase a bond at either par value, at a discount, or at a premium.
This course is designed to help students understand the concepts of mathematics of investment and credit, as well as provide a starting point in preparation for the Actuarial Exam FM (Financial Mathematics).
Financial Mathematics requires a proficient understanding of Calculus concepts such as derivative and integration techniques. This implies that a solid understanding in various algebra skills, including manipulating equations, basic factoring methods, solving logarithmic equations, and more, are also required to fully comprehend and learn the concepts of the Financial Mathematics course.
Video Chapters:
0:00 What is a Bond?
0:49 Components of a Bond
5:02 Finding the Price Formula
8:51 Example Problem
15:48 Effects of Yield Rate & Coupon rate
18:32 Buying at Par, Discount, and Premium
📝 Examples Video: [ Ссылка ]
⏩ Next Lesson: [ Ссылка ]
📺 Course Playlist: [ Ссылка ]
🌐 Visit My Website: [ Ссылка ]
⚡️Math Products I Recommend⚡️
Graphing Calculator: [ Ссылка ]
Non-Graphing Calculator: [ Ссылка ]
Financial Calculator: [ Ссылка ]
Graphing Paper: [ Ссылка ]
College Rule Paper: [ Ссылка ]
My Favorite Pencil: [ Ссылка ]
My Favorite Erasers: [ Ссылка ]
Calculus Workbook: [ Ссылка ]
⚡️Textbooks I Use⚡️
Calculus 1 & 2: [ Ссылка ]
Calculus 3: [ Ссылка ]
Financial Mathematics: [ Ссылка ]
⚡️My Recording Equipment⚡️
iPad Air: [ Ссылка ]
Apple Pencil (Gen 2): [ Ссылка ]
Tablet Desk Stand: [ Ссылка ]
External Hardrive: [ Ссылка ]
(Commissions earned on qualifying purchases)
Find me on social media:
Facebook: [ Ссылка ]
Twitter: [ Ссылка ]
Instagram: @jk_mathematics
Found this video to be helpful? Consider giving this video a like and subscribing to the channel!
Thanks for watching! Any questions? Feedback? Leave a comment!
-Josh from JK Math
#math #finance #examfm
Disclaimer: Please note that some of the links associated with the videos on my channel may generate affiliate commissions on my behalf. As an amazon associate, I earn from qualifying purchases that you may make through such affiliate links.
