Jim Wilcox Bond Yields‚ Returns‚ Risks‚ and Duration • • • • • Bonds and Loans Yields and Returns Price Volatility and Risk in Default-Free Bonds Measuring Interest Rate Risk Duration: Types‚ Calculation‚ Meaning‚ Uses • Next Time: Chapter 11 re: Duration Week # 2 January 28‚ 2014 1 Coming Soon! What We Did 1. 2. 3. 4. Week # 2 January 28‚ 2014 2 Yield to Maturity (YTM): A Result‚ Not a Cause! • YTM = percentage rate that equates (known) bond price to PV
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on Risk and Return 1) Using the following returns‚ calculate the arithmetic average returns‚ the variances and the standard deviations for X and Y. Year X Y 1 8% 16% 2 21 38 3 17 14 4 -16 -21 5 9 26 2) You bought one of the Great White Shark Repellant Co’s 8 per cent coupon bonds one year ago for $1030. These bonds make annual payments and mature six years from now. Suppose you decide to sell your bonds today ‚when the required return on the bonds is 7 per cent .If the inflation
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PROS of Convertible Bonds Convertible bonds offer an investor the opportunity for income in a company in that they typically pay a fixed rate of interest. They also allow an investor the ability to take ownership in the company when they convert that bond to a stock. An investor that is satisfied with that fixed rate of interest can rest a little easier and not have to worry about the common stock fluctuating with the stock markets gyrations. Like other types of bonds investors can park
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5 Bond Yields for Johnson & Johnson Objective: The case enables the student to gain insight into the financing activities of large corporations and to practice calculating bond prices and yields. Computations are carried out for annual and semiannual interest periods‚ and for fractional periods. Case Discussion: Johnson & Johnson is one of the leading pharmaceutical firms in the world. It is large and financially sophisticated. When it needs to borrow money‚ it sells bonds where
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Chapter 1 Carbon Compounds and Chemical Bonds. (Covered material: 1.1 - 1.8; 1.12 - 1.17) 1. Structural Theory – most fundamental theory of Organic Chemistry (developed independently by A. Kekule‚ A. Couper and A. Butlerov between 1858 and 1861). Organic Compounds – compounds of carbon and hydrogen. Other elements frequently found in organic compounds are: oxygen‚ nitrogen and halogens (F‚ Cl‚ Br‚ I); less frequently found are: sulfur and phosphorus. Review Periodic Table for determining valence
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Corruption of Running a Bail Bonds Business As early as 1912 – over one hundred years ago – critics were concerned that poor people remained in jail while awaiting trial solely because of their inability to pay even small bail amounts‚ that bail bondsmen had become too prominent in the administration of justice and that corruption plagued the industry. The Justice Policy Institute (JPI) feels that the bail bonding industry stands in the way of fair and effective pre-trial justice with much backed
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Municipal Bonds The greatest advantage of municipal bonds can be summed up in two words: tax free. The interest rates on municipal bonds may seem low compared to similar long-term securities like Treasury bills and CDs‚ but tax advantages may level the playing field. Let ’s look at some examples. If you ’re in the 25 percent bracket for 2008 federal income taxes‚ you ’d have to find a taxable security with an interest rate of 4 percent to equal the yield of a tax-free municipal bond with an interest
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106 B lo o m b e r g M a r k e t s February 2003 FO CUS S yn d i c a t e d L o a n s Comparing a Syndicated Loan With a Bond Use the Asset Swap Calculator to evaluate pricing spreads. B y ‚how do you determine whether an John Bridge the top of the screen. However‚ the OAS isn’t directly comparable to the discount margin because of the way the OAS gets calculated. The OAS uses unique current spot‚ or zero‚ rates to discount cash flows according to their terms along the entire swap
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Vibration- Rotation Spectroscopy of HCl and DCl Purpose: To determine the fundamental vibration frequency and bond length for H35Cl‚ H37Cl‚ D35Cl‚ and D37Cl and to compare the isotope effects to theoretically predicted values. Introduction Vibration spectroscopy is one of the most important tools for the accurate determination of molecular structure. Vibration spectroscopy also plays an important role in environmental chemistry. For example‚ the albedo of the earth’s atmosphere is controlled by the
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released a 100 year of bonds‚ with an interest value of 7.55% that is to be paid in every six months with overdue dates. Response to the deal was divided‚ even if the bonds had been there in the past‚ the level of debates on the matter raised the danger of debt payment ability of the debtors. The affiliation was viewed as a plus to Walter Disney Corporation and U.S economic system where its quest doubled up from $150 million to $300 million. Immediately the Walter Disney established their bond. Coke Cola
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