Lecture 1, Part III: Bond “Mathematics”
MIT 18.642 Topics in Mathematics with Applications in Finance, Fall 2024
Instructor: Vasily Strela
View the complete course: https://ocw.mit.edu/courses/18-642-topics-in-mathematics-with-applications-in-finance-fall-2024
YouTube Playlist: https://www.youtube.com/playlist?list=PLUl4u3cNGP601Q2jo-J_3raNCMMs6Jves
This segment by Vasily Strela provides an explanation of interest rates, bonds, and their fundamental role in finance. It covers key concepts such as compound interest, discounting future cash flows, zero-coupon and coupon bonds, and the inverse relationship between bond prices and yields. The discussion also explores yield curves, their historical shapes, and how they can signal economic recessions, emphasizing the importance of understanding bond price sensitivities through measures like duration and convexity for effective fixed-income investing.
License: Creative Commons BY-NC-SA
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More courses at https://ocw.mit.edu
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We encourage constructive comments and discussion on OCW’s YouTube and other social media channels. Personal attacks, hate speech, trolling, and inappropriate comments are not allowed and may be removed. More details at https://ocw.mit.edu/comments.
Instructor: Vasily Strela
View the complete course: https://ocw.mit.edu/courses/18-642-topics-in-mathematics-with-applications-in-finance-fall-2024
YouTube Playlist: https://www.youtube.com/playlist?list=PLUl4u3cNGP601Q2jo-J_3raNCMMs6Jves
This segment by Vasily Strela provides an explanation of interest rates, bonds, and their fundamental role in finance. It covers key concepts such as compound interest, discounting future cash flows, zero-coupon and coupon bonds, and the inverse relationship between bond prices and yields. The discussion also explores yield curves, their historical shapes, and how they can signal economic recessions, emphasizing the importance of understanding bond price sensitivities through measures like duration and convexity for effective fixed-income investing.
License: Creative Commons BY-NC-SA
More information at https://ocw.mit.edu/terms
More courses at https://ocw.mit.edu
Support OCW at http://ow.ly/a1If50zVRlQ
We encourage constructive comments and discussion on OCW’s YouTube and other social media channels. Personal attacks, hate speech, trolling, and inappropriate comments are not allowed and may be removed. More details at https://ocw.mit.edu/comments.
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