FIN 311 Study Guide - Midterm Guide: Umber, United States Treasury Security, Net Present Value
14 Dec 2019
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To switch to annuity due: 2nd > bgn > 2nd, but most are in ordinary annuity. Pmt is positive if its at the end of the period, pmt is negative if its at the beginning of a period. Solving uneven cf=enter #s into co, npv then the % for i, down arrow and compute. Periodic rate=rate provided/m (how many times compounded per year) Compounding=fv=pv(1+inom/m)m x n r=r*+ip+drp+lp+mrp (nom/req return=risk free+infl. Inflation = sum of inflation rates / n. Corp bond yield spread=corp bond yield - treasury bond yield = drp+lp. Ytm & ytc = solving for i/y. Price(pv) of bond=regular as calculating for pv but pmt = par value * copon/bond rate. Market value of bonds = pv * number of bonds----book value/ par value. Yield on 1 year tbond = r* + inflation rate.
