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Corporate Finance 003: Yield and Term Structure

Terminology of Rates

It is pretty confusing if you are unsure of the terms used when quoting interest rates. Here is a simple introduction based on U.S. 224 more words

Work

[PGP-I FM] Term structure of interest rates

In a previous post we introduced the notion of the term structure of interest rates. Here we try and understand the shape of the term structure. 1,725 more words

Teaching: FM

[PGP-I FM] Forward rates

Consider the following situation. A businesswoman wants to borrow money for 1 year, but she wants to start the loan at the end of 1 year, i.e. 432 more words

Teaching: FM

[PGP-I FM] Yield to maturity and bootstrapping

Till we began our discussion on bond markets, we had been working with the following pricing equation with a constant rate of interest, :

But clearly, in the real world we just don’t have one interest rate, but as a  802 more words

Teaching: FM