mid3-review - Finance 432 Investment Analysis and...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Finance 432 – Investment Analysis and Management Review Notes for Midterm Exam #3 1. Bond Investing 2. Characteristics of bonds Coupon rate and interest payment Maturity date; Call provision; Call premium and call price Face value; Zero coupon bonds; Required rate of return 3. Interest rate risk: price risk vs. reinvestment risk Interest rate price risk vs. interest rate reinvestment risk 4. Bond valuation: concepts and calculations P (intrinsic value); YTM; YTC; CY 5. Term structure theories 6. Principles of bond price behavior 7. Duration: concepts and calculations Macaulay duration, D = = T t t w t 1 * , where 0 ) 1 /( P y CF w t t t + = Relationship between duration and bond price volatility P P = - D y y + + 1 ) 1 ( = - D * y where D * = y D + 1 , is the modified duration 8. Bond immunization: concepts and applications 9. Convertible bonds: concepts and calculations Conversion period; conversion ratio; conversion value; conversion premium; investment value
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/11/2010 for the course BUSINESS FIN taught by Professor Sata during the Spring '10 term at A.T. Still University.

Page1 / 3

mid3-review - Finance 432 Investment Analysis and...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online