11-Bonds - Class Business Current Events Upcoming Homework...

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Class Business Current Events Upcoming Homework Bonds Many different types of bonds or fixed-income securities Discount or zero-coupon – Coupon – Consol – Fixed-Payment We know how to calculate bond prices given an interest rate. Just discount back all future cash flows We also know how to go in the other direction. Calculate the return to an investment, implicit in the bond’s price. Calculate the Yield-to-Maturity A measure of the cost of borrowing and the reward for lending. We will use the terms yield and interest rate interchangeably. One of the characteristics we like about yield is that is provides an estimate of the expected return on a bond.
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