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Relationship between bond prices and interest rates | Finance & Capital Markets | Khan Academy
 
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Why bond prices move inversely to changes in interest rate. Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/treasury-bond-prices-and-yields?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/introduction-to-the-yield-curve?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Finance and capital markets on Khan Academy: Both corporations and governments can borrow money by selling bonds. This tutorial explains how this works and how bond prices relate to interest rates. In general, understanding this not only helps you with your own investing, but gives you a lens on the entire global economy. About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content. For free. For everyone. Forever. #YouCanLearnAnything Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1 Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy
Views: 497200 Khan Academy
Interest Rate Risk
 
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http://www.kanjoh.com. disclaimer - none of these videos is meant to be personalized financial advice.
Views: 27168 kanjohvideo
Bond Duration and Interest Rate Risk - What they are and why they are important
 
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http://www.learnbonds.com/bond-duration/ - Bond Duration is a measurement of how long it takes for the price of a bond to be matched by the money it generates. Here is a video overview.
Views: 10436 Learn Bonds
Relationship between Bond Price & Interest Rate
 
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This video will help you understand the relationship between interest rate and the value of a bond. This video will clear your logic for why is it negative for the bond market when interest rate rises. Why is there an inverse relationship Interest Rate & Bond Price. Please leave us a comment/suggestion on our video and do hit "LIKE" if you like the video. SUBSCRIBE TO OUR CHANNEL FOR FULL ACCESS TO ALL OUR VIDEOS ABOUT US: Ambition Learning Solutions is a preemptive training institute providing trainings to undergraduates, post graduates and working professionals on various international certification programs like Certified Financial Planner (CFP), Certified Credit Research Analyst (CCRA), Basics of Financial Markets, Macro Economic Indicators impacting the Financial Markets, Derivatives Market, Technical Analysis, Credit Research, Commercial Banking, Investment Banking, Financial Modeling, Advance Excel, Equity Research, Diploma in Banking and Finance (DBF), NSE's Certified Capital Market Professional (NCCMP) etc. We assist corporate by providing qualified human resources for their operation and expansion requirement. We train their existing staff to furnish them with the latest updates and techniques in their respective domains. Reach us at: Website: www.ambitionlearning.com Facebook: https://www.facebook.com/groups/ambitionlearning/ Email: [email protected] Linkedin: http://www.linkedin.com/profile/view?id=67196015&trk=wvmp-profile
Bond Investing - Interest Rate Risk
 
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To view the next video in this series, please click here: http://www.monkeysee.com/play/19128-bond-investing-interest-rate-risk
Views: 910 MonkeySee
What Happens to My Bonds When Interest Rates Rise?
 
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With interest rate hikes and indications that there will be further increases this year, we've been receiving questions about the impact of rising interest rates on a bond portfolio. In this video, Pure Financial's Director of Research, Brian Perry, CFP®, CFA® answers the question, "what will happen to my bond portfolio when interest rates rise?" If you would like to schedule a free assessment with one of our CFP® professionals, click here: https://purefinancial.com/lp/free-assessment/ Make sure to subscribe to our channel for more helpful tips and stay tuned for the next episode of “Your Money, Your Wealth.” http://bit.ly/2FDSfK2 Channels & show times: http://yourmoneyyourwealth.com https://purefinancial.com IMPORTANT DISCLOSURES: • Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, Inc. A Registered Investment Advisor. • Pure Financial Advisors Inc. does not offer tax or legal advice. Consult with their tax advisor or attorney regarding specific situations. • Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. • Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. • All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. • Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.
What is INTEREST RATE RISK? What does INTEREST RATE RISK mean? INTEREST RATE RISK meaning
 
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What is INTEREST RATE RISK? What does INTEREST RATE RISK mean? INTEREST RATE RISK meaning - INTEREST RATE RISK definition - INTEREST RATE RISK explanation. Source: Wikipedia.org article, adapted under https://creativecommons.org/licenses/by-sa/3.0/ license. Interest rate risk is the risk that arises for bond owners from fluctuating interest rates. How much interest rate risk a bond has depends on how sensitive its price is to interest rate changes in the market. The sensitivity depends on two things, the bond's time to maturity, and the coupon rate of the bond. Interest rate risk analysis is almost always based on simulating movements in one or more yield curves using the Heath-Jarrow-Morton framework to ensure that the yield curve movements are both consistent with current market yield curves and such that no riskless arbitrage is possible. The Heath-Jarrow-Morton framework was developed in the early 1991 by David Heath of Cornell University, Andrew Morton of Lehman Brothers, and Robert A. Jarrow of Kamakura Corporation and Cornell University. There are a number of standard calculations for measuring the impact of changing interest rates on a portfolio consisting of various assets and liabilities. The most common techniques include: 1. Marking to market, calculating the net market value of the assets and liabilities, sometimes called the "market value of portfolio equity". 2. Stress testing this market value by shifting the yield curve in a specific way. 3. Calculating the value at risk of the portfolio. 4. Calculating the multiperiod cash flow or financial accrual income and expense for N periods forward in a deterministic set of future yield curves. 5. Doing step 4 with random yield curve movements and measuring the probability distribution of cash flows and financial accrual income over time. 6. Measuring the mismatch of the interest sensitivity gap of assets and liabilities, by classifying each asset and liability by the timing of interest rate reset or maturity, whichever comes first. 7. Analyzing Duration, Convexity, DV01 and Key Rate Duration. The assessment of interest rate risk is a very large topic at banks, thrifts, saving and loans, credit unions, and other finance companies, and among their regulators. The widely deployed CAMELS rating system assesses a financial institution's: (C)apital adequacy, (A)ssets, (M)anagement Capability, (E)arnings, (L)iquidity, and (S)ensitivity to market risk. A large portion of the (S)ensitivity in CAMELS is interest rate risk. Much of what is known about assessing interest rate risk has been developed by the interaction of financial institutions with their regulators since the 1990s. Interest rate risk is unquestionably the largest part of the (S)ensitivity analysis in the CAMELS system for most banking institutions. When a bank receives a bad CAMELS rating equity holders, bond holders and creditors are at risk of loss, senior managers can lose their jobs and the firms are put on the FDIC problem bank list. See the (S)ensitivity section of the CAMELS rating system for a substantial list of links to documents and examiner manuals, issued by financial regulators, that cover many issues in the analysis of interest rate risk. In addition to being subject to the CAMELS system, the largest banks are often subject to prescribed stress testing. The assessment of interest rate risk is typically informed by some type of stress testing.
Views: 4122 The Audiopedia
Bond Investing 101: Understanding Interest Rate Risk and Credit Risk
 
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This video is one part of BondSavvy's 10-part video "The Crash Course on Corporate Bond Investing." The full Crash Course video is included with a subscription to BondSavvy https://www.bondsavvy.com/corporate-bond-investment-picks or can be bought on its own here https://www.bondsavvy.com/a-la-carte/corporate-bond-investing-101. This video explains the differences between interest rate risk and credit risk and how you can factor this into your next corporate bond investment. Many investors only invest in investment-grade bonds because they are afraid of the default risk of high-yield (or below investment grade) bonds. The challenge with this thinking is that investment-grade bonds often have longer durations (or time until maturity) and are therefore more sensitive to changes in interest rates. To alleviate these risks, it's important for investors to consider both investment-grade and non-investment-grade corporate bonds. You will learn the following by watching this video: * Difference between investment-grade corporate bonds and high-yield corporate bonds * Difference in default rates between investment-grade corporate bonds and high-yield corporate bonds * How bond prices are quoted * How owning high-yield corporate bonds can help reduce investors' interest rate risk * Why shorter-dated bonds are less sensitive to changes in interest rates * What happens to bond prices when interest rates increase?
Views: 137 BondSavvy
Interest rates rise when bond prices fall
 
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Interest rates go up and the price of the bonds go down. A quick illustration to help you understand that concept.
Views: 1622 That Bond Guy
Bond Prices and Interest Rates
 
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How a bond works, how bond prices change inversely with interest rates, and how open market operations by the FED influence interest rates and the economy.
Views: 43500 TheWyvern66
BVTV: Bonds and interest rate risk
 
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This week on BVTV, Fund Manager Matt Russell joins in to discuss bonds and interest rate risk: 1) Why an interest rate shock could cause carnage in bond markets 2) The duration impact on a credit portfolio 3) Best strategies to hedge against interest rate risk going forward Bond Vigilantes TV - The weekly review of global bond markets by the M&G Fixed Income team. https://www.bondvigilantes.com https://twitter.com/bondvigilantes
Views: 1513 Bond Vigilantes
Explaining Bond Prices and Bond Yields
 
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​In this revision video we work through some numerical examples of the inverse relationship between the market price of fixed-interest government bonds and the yields on those bonds. ​Government bonds are fixed interest securities. This means that a bond pays a fixed annual interest – this is known as the coupon The coupon (paid in £s, $s, Euros etc.) is fixed but the yield on a bond will vary The yield is effectively the interest rate on a bond. The yield will vary inversely with the market price of a bond 1.When bond prices are rising, the yield will fall 2.When bond prices are falling, the yield will rise - - - - - - - - - MORE ABOUT TUTOR2U ECONOMICS: Visit tutor2u Economics for thousands of free study notes, videos, quizzes and more: https://www.tutor2u.net/economics A Level Economics Revision Flashcards: https://www.tutor2u.net/economics/store/selections/alevel-economics-revision-flashcards A Level Economics Example Top Grade Essays: https://www.tutor2u.net/economics/store/selections/exemplar-essays-for-a-level-economics
Views: 37557 tutor2u
Excel Finance Class 54: Bonds & Interest Rate Risk
 
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Download Excel workbook http://people.highline.edu/mgirvin/ExcelIsFun.htm Learn Interest Rate Risk: 1. The Longer The Maturity, The More YTM Affects Bond Price 2. The Lower The Coupon Rate, The More YTM Affects Bond Price
Views: 11826 ExcelIsFun
Bonds and Interest Rate Risk
 
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Interest Rate Risk
Views: 703 Kevin B
How Interest Rates Affect the Market
 
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Investors should observe the Federal Reserve’s funds rate, which is the cost banks pay to borrow from Federal Reserve banks. What's going on with Japan's interest rates? Read here: http://www.investopedia.com/articles/investing/012916/bank-japan-announces-negative-interest-rates.asp?utm_source=youtube&utm_medium=social&utm_campaign=youtube_desc_link
Views: 73395 Investopedia
CFA Level I Measurement of Interest Rate Risk Video Lecture by Mr. Arif Irfanullah part 1
 
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This CFA Level I video covers concepts related to: • Measuring Interest Rate Risk (Full Valuation Approach and Duration/Convexity Approach) • Computing Effective Duration • Convexity Adjustments For more updated CFA videos, Please visit www.arifirfanullah.com.
Views: 25763 IFT
2016 - FRM : Interest Rate Part I(of 4)
 
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FinTree website link: http://www.fintreeindia.com FB Page link :http://www.facebook.com/Fin... Explain Treasury rates, LIBOR, and repo rates, and what is meant by the "risk-free" rate The value of an investment using different compounding frequencies Interest rates based on different compounding frequencies The theoretical price of a bond using spot rates Find forward interest rates from a set of spot rates Find the value of the cash flows from a forward rate agreement(FRA) The duration, modified duration and dollar duration of a bond The limitations of duration and explain how convexity addresses some of them The change in a bond's price given its duration, its convexity, and a change in interest rates The major theories of the term structure of interest rates We love what we do, and we make awesome video lectures for CFA and FRM exams. Our Video Lectures are comprehensive, easy to understand and most importantly, fun to study with! This Video lecture was recorded by our popular trainer for CFA, Mr. Utkarsh Jain, during one of his live FRM Classes in Pune (India).
Views: 13673 FinTree
Bonds and Interest Rate Risk
 
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Bonds and Interest Rate Risk
Views: 117 Kevin B
Interest Rate Risk Immunisation (Part 1) | Portfolio Management
 
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https://goo.gl/vbjHvh for more FREE video tutorials covering Portfolio Management.
Views: 1358 Spoon Feed Me
Investopedia Video: The Basics Of Bond Duration
 
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Duration tells investors the length of time, in years, that it will take a bond's cash flows to repay the investor the price he or she paid for the bond. A bond's duration also tells investors how much a bond's price might change when interest rates change i.e. how much risk they face from interest rate changes.
Views: 89374 Investopedia
CFA Level I Risks in Bond Investing Video Lecture by Mr. Arif Irfanullah Part 1
 
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This CFA Level I video covers concepts related to: • Bond Risks • Interest Rate Risk for Option Free Bond and Callable Bond • Factors Affecting Interest Rate Risk • Floating Rate Securities • Measure Interest Rate Risk with Duration • Price Impact of Yield Changes • Duration and Yield Curve Risk For more updated CFA videos, Please visit www.arifirfanullah.com.
Views: 33713 IFT
Bond Duration and Immunization
 
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In this video, I demonstrate how to create a bond portfolio that will insulate the investor from interest rate risk.
Views: 7457 Shane Van Dalsem
Definitive description of Interest Rate Risk Reinvestment Risk and Call Risk
 
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Definitive description of Interest Rate Risk Reinvestment Risk and Call Risk with examples and visual aids.
Views: 1043 Qobil Yunusov
Bonds   Interest Rate Risk; sample problems valuing bonds of different durations
 
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Price risk is the concern that rising yield (interest rate) will cause the value of a bond to fall. The longer duration bond (longer maturity and lower coupon rate) will have more price risk than the shorter duration bond. Reinvestment rate risk is the concern that yield will fall, and future CFs will have to be reinvested at lower rates.
Views: 777 Elinda Kiss
Introduction to the yield curve | Stocks and bonds | Finance & Capital Markets | Khan Academy
 
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Introduction to the treasury yield curve. Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/relationship-between-bond-prices-and-interest-rates?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/introduction-to-bonds?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Finance and capital markets on Khan Academy: Both corporations and governments can borrow money by selling bonds. This tutorial explains how this works and how bond prices relate to interest rates. In general, understanding this not only helps you with your own investing, but gives you a lens on the entire global economy. About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content. For free. For everyone. Forever. #YouCanLearnAnything Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1 Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy
Views: 348559 Khan Academy
Bond Duration and Interest Rate Risk - What they are and why they are important - Learn Bonds
 
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http://myfirstho.me/ Bond Duration and Interest Rate Risk - What they are and why they are important - Learn Bonds - This video shows: ECO 2013 Part II 5 Tools of Monetary Policy 11712.mp4 The basics of bonds - MoneyWeek Investment Tutorials Insólito vídeo cuando Roberto Baggio conoce a Messi por primera vez - Exclusivo Bond Prices and Interest Rates Calculating Bond Prices and Interest Rates Do It Yourself Home Roofing REPLACING SHINGLE ROOF step by step What is a Bond? Bonds vs. Stocks -- Stock Market Education -- Investing Courses and Tutorials Intro to Monetary Policy.mp4 ECO 2013 111912 Part II Sin Taxes, Arbitrage, & Externalities The basics of bonds - MoneyWeek Investment Tutorials Relationship Between Bond Prices and Interest Rates Finance Lecture - Bonds and Stocks 6. What is a Bond Amoratizing Using Effective Interest Method Exercise 14-5 Bond Amortization (Straight Line Amortization Vs Effective Interest Method, Yield Rate Calculated) Voter Fraud and Voter Suppression Monetarism The Basics Bond Valuation Unique attribution to the wonderful youtubersin this article. Please go ahead and search their titles earlier mentioned. TheWyvern66 MoneyWeekVideos juankmilo3946 arnoldhite 724Ripper Allied Roofing & Sheet Metal, Inc. Gregg Killpack TheWyvern66 TheWyvern66 TheWyvern66 moneycontent Practical Money Skills Brad Simon Preston Pysh FacebookMarketingCom Allen Mursau TheWyvern66 Prof. Mohammed Ahmed
Views: 568 MyFirstHomeNetwork
Interest rate risk and reinvestment risk in bond investment
 
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Interest rate risk and reinvestment risk in bond investment
Interest Rate Risk
 
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Remember the value of Bonds can fluctuate up and down based on factors such as the movement of Interest Rates, This is Called Interest Rate Risk, it affects all bonds regardless of there credit Quality. Watch the Video to know more about the Interest Rate risk and understand the term in a simple yet easy manner! Visit Our website :- http://www.trpcweb.com/education/education-videos/
Bonds 101 – What is Duration?
 
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Duration is a measure of a bond’s interest rate sensitivity expressed in years. Generally, the longer the duration, the more sensitive the bond’s price is to interest rate changes and the higher the price volatility it faces. On the contrary, bonds with shorter duration are less sensitive to interest rate change and subject to lower price volatility. There are three common types of duration and “Effective Duration” is most commonly used. Duration measures the time it takes to repay the investor and it is not equal to bond maturity. Duration is usually shorter than bond maturity as bonds pay coupon interest. In addition to maturity and coupon rate, “Effective Duration” also takes into account the embedded call features and yield-to-maturity. For instance, if rates were to rise 1%, a bond portfolio with a duration of 10 years would be expected to lose 10%. By contrast, a 1% rate hike would cause a portfolio with a duration of 5 years to lose 5% of its value. Therefore, if interest rates are expected to rise, a prudent strategy would be to hold bonds or bond funds with shorter duration as the bond prices are less sensitive to changes in interest rates. Conversely, it may make more sense to focus on longer-duration bonds or bond funds should interest rates be expected to fall. This example is for illustration purposes only. Investors should always be mindful about the market volatility, and fully understand the investment risks before proceeding further.
Bonds, Interest Rates, and the Impact of Inflation
 
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This educational video discusses the basics of bonds. People interested in investing should speak with their financial advisor. The video was produced by Mark Matos, a financial advisor in Naples FL. Blog: http://www.globalwealthconsultants.com/Blog.aspx Follow me on: Facebook: https://www.facebook.com/mark.matos Google+: https://plus.google.com/+MarkMatos1 Linkedin: https://www.linkedin.com/in/markamatos Twitter: https://twitter.com/MarkAMatos Music by Chris Zabriskie
Views: 4863 Mark Matos
Convexity and Interest Rate Risk
 
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A demonstration on calculating convexity and using it to estimate the interest rate risk of a bond
CFA Level I Measurement of Interest Rate Risk Video Lecture by Mr. Arif Irfanullah part 2
 
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This CFA Level I video covers concepts related to: • Callable Bond Value • Price-Yield for Putable Bond • Using Duration • Duration (Macaulay Duration, Modified Duration and Effective Duration) • Duration Interpretation • Bond Portfolio Duration • Modified and Effective Convexity • Price Value of a Basis Point For more updated CFA videos, Please visit www.arifirfanullah.com.
Views: 17449 IFT
Money and Banking: Lecture 9 - Interest Rate Risk
 
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This course covers the nature and functions of money. Topics include a survey of the operation and development of the banking system in the U.S. and an introduction to the monetary policy. Learn more about Missouri State iCourses at http://outreach.missouristate.edu/icourses.htm
Duration and Interest Rate Risk
 
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A brief demonstration on estimating the interest rate risk by using the concepts of Duration and Modified Duration.
Interest Rate Risk in Debt Capital Markets
 
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Whether you raise money through loans or bonds, there will nearly always be an element of interest rate risk. This short video looks at where this risk exists and looks at how it may be managed through swaps and options.
Views: 800 Swapskills Academy
Risks of Bonds
 
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This video examines various risks which are associated with investing in bonds. The areas of risk covered include: - Default Risk: the risk that the issuer will not be able to pay back the loan - Inflationary Risk: the risk that spending power will be eroded (-ve rate of return). - Callability Risk: the risk that the bond will be bought back for less than you paid for it. - Liquidity risk: the risk that you won't be able to sell when you want to. - Political Risk: actions taken by governments which affect the bond market - Interest rate risk: the risk that interest rates will rise thus lowering bond prices.
Bonds & Interest Rate Risk
 
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Bonds & Interest Rate Risk including bond features, immunization, and duration. Also see/hear Borrowing
Views: 14688 drcinvests
Session 2: Understanding Risk - The Risk in Bonds
 
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In this session, we examine the risks of investing in bonds. Even if the payments on the bond are guaranteed (there is no default risk), you face interest rate risk after you buy the bond and we look at simple measures of interest rate risk exposure. We also look at the additional risk that comes from default, how best to measure that default risk and how much to demand as compensation for exposure to that risk.
Views: 12203 Aswath Damodaran
Short Term High Yield Bonds
 
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The current low interest rate environment means that bond investors have to take more risk in order to gain an attractive return on their invested money. The current low interest rates also present a risk that if interest rates and inflation rise in the future, then bond prices may fall and portfolios could suffer losses.
Views: 7162 hubbis
Grant Sees Interest Rate Risk for Municipal Bonds
 
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Feb. 2 (Bloomberg) -- James Grant, publisher of Grant's Interest Rate Observer, discusses risk for municipal bonds and U.K. debt and opportunities in real estate investment trusts. He talks with Pimm Fox on Bloomberg Television's "Taking Stock." (Source: Bloomberg)
Views: 1726 Bloomberg
Chapter 6, Part 1:  The Risk Structure of Interest Rates
 
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This video explain how default risk, liquidity, and tax differences affect the interest rates of bonds. Thanks for watching!
Duration and Price Sensitivity
 
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Dr. Levkoff gives a 10 minute crash course on the relationship between duration and price sensitivity of a cash flow to changes in interest rates/yields. Also included is a brief discussion of immunization (duration and convexity) and cash flow matching.
Views: 3406 Steve L
The math behind interest rate risk in 2 minutes
 
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The math behind calculating interest rate risk is not really that complicated. However, we have build a tool that does it all for you including historical pricing on just about every bond.
Views: 1367 That Bond Guy
What is Interest Rate Risk? - Term Buster - Franklin Templeton India
 
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What is Interest Rate Risk? Interest rate risk is the risk associated with the change in the value of debt securities due to increase & decrease of interest rates Bond price and interest rate have an inverse relation. How much interest rate risk a bond has depends on how sensitive its price is to interest rate changes in the market. Find out more about interest rate risk and how it determines the bond price Watch our “Term Busters” series and de-complicate investments." Visit Investor Education Section of our website - https://www.franklintempletonindia.com/investor/investor-education/new-to-investing Watch more, and we’ll help you learn about different types of funds offered by Franklin Templeton. https://www.youtube.com/playlist?list=PLpDLpRd877mTfptx_2dTYyY8g6nfa-Qk6 You can also write to us with your feedback ([email protected]) View more such videos in the playlist Franklin Templeton Academy: https://www.youtube.com/playlist?list=PLpDLpRd877mSF4p7DIh5OMhS6zktFJ4IP Invest in Mutual Funds with Franklin Templeton. Official Website: https://www.franklintempletonindia.com/ Facebook: https://www.facebook.com/FranklinTempletonIndia/ LinkedIn: https://www.linkedin.com/company/franklin-templeton-investments Instagram: https://www.instagram.com/ftiindia/?hl=en Twitter: https://twitter.com/ftiindia?lang=en
Views: 789 TempletonIndia
Term Structure of Interest Rates
 
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More videos at http://facpub.stjohns.edu/~moyr/videoonyoutube.htm
Views: 33252 Ronald Moy
Session 07: Objective 1 - Bonds and Bond Valuation
 
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The Finance Coach: Introduction to Corporate Finance with Greg Pierce Textbook: Fundamentals of Corporate Finance Ross, Westerfield, Jordan Chapter 7: Interest Rates and Bond Valuation Objective 1 - Key Objective: Bonds Bond Cycle Inverse relationship between bond value and interest rate Face Value vs. Discount vs. Premium Bond To minimize interest rate risk purchase a bond with 1) shorter time to maturity 2) higher coupon rate Semiannual vs. Annual Coupons Bond Value Formula Coupon (C) Time to Maturity (t) Yield to Maturity (r) Face value paid at maturity (FV) Fisher Effect (Exact vs. Approximate) Nominal Rate (R) Real Rate (r) Inflation Rate (h) More Information at: http://thefincoach.com/
Views: 34603 TheFinCoach
Bonds Are Subject To Interest Rate Risk And Duration Risk
 
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In a Money Talk Video, Dave Sandstrom explains that duration -- or time until maturity -- is a good way for investors to judge bonds' sensitivity as interest rates rise and fall. Dave Sandstrom is a vice president and investment advisor at Landaas & Company. http://www.landaas.com/about/talent/advisors/dave-sandstrom Money Talk video by Peter May (initially posted April 15, 2013) More Money Talk http://www.landaas.com/money-talk Landaas & Company Money Talk newsletter http://www.landaas.com/about/newsletter Follow Landaas & Company on Twitter http://www.Twitter.com/@_Money_Talk Further information Duration -- What an Interest Rate Hike Could Do to Your Bond Portfolio, by the Financial Industry Regulatory Authority http://www.finra.org/Investors/ProtectYourself/InvestorAlerts/Bonds/P204318
Views: 211 Money Talk
Hedge Interest Rate Risk with a Bond Ladder
 
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http://www.profitableinvestingtips.com/investing-trading/hedge-interest-rate-risk-with-a-bond-ladder Hedge Interest Rate Risk with a Bond Ladder By www.ProfitableInvestingTips.com Is it time to hedge interest rate risk with a bond ladder? We are living in a period of historically low interest rates. The United States Federal Reserve has been buy US treasuries and thereby driving down interest rates. They are doing this to help promote investment in increased employment. They are succeeding to a degree as the United States unemployment rate has fallen over the last few years from ten percent to eight and two tenths percent. Reliable predictions have the unemployment rate at eight percent or lower by the end of the year. United States manufacturing is gaining and corporate profits from the likes of 3M, ATT, Verizon, and GE are up. Thus the Fed has decided to forego more stimulus. Some investors assume that the worst is over. They may decide to invest in Apple for the dividend, invest in Hewlett Packard for a rebound, or take a run at investing in Kodak during bankruptcy. But others are putting their money in AAA bonds or US Treasuries as they wait for the economy to gain steam. If you are one of these folks, how does an investor avoid getting stuck with low interest rate bonds as interest rates rise? Part of the solution is to hedge interest rate risk with a bond ladder. What Is a Bond Ladder? A bond ladder is an investment device wherein investors purchase bonds (or treasuries or CD's) with relatively short maturities. To hedge interest rate risk with a bond ladder an investor can have all bonds mature at the same time or stagger the maturity dates. For example, an investor may purchase 1 year bonds, CD's, or treasuries. He can buy them all at once and have them mature all at one or he can stagger them so that a forth mature every three months. In either case he will not get caught with long term securities that become devalued as interest rates rise. The down side when one decides to hedge interest rate risk with a bond ladder is that he is usually not holding long term bonds when interest rates fall. Thus he does not benefit from bond appreciation to any great degree. If your answer to what is a good investment in this environment is that it has to be a conservative investment, then to hedge interest rate risk with a bond ladder may be the ideal choice. Balancing an Investment Portfolio Consider this. The economy is improving and there may well be some very good long term investment options just around the corner. But, the European debt dilemma could come back with a vengeance or a spectacular crash of the Chinese real estate bubble could through the world economy back into recession. So, hedge interest rate risk with a bond ladder with the fixed income part of your investment portfolio. The older you are and the closer to retirement you are the larger portion of your portfolio should be allotted to such a conservative approach. Dividend stocks or the big cap and stable variety are also a standard conservative approach. If you are looking to hit a home run by investing in penny stocks in this market, however, make sure that your fundamental analysis is sound and that you keep up to date with market sentiment. For more insights and useful information about investments and investing, visit www.ProfitableInvestingTips.com. http://youtu.be/Hx2h1SeD_CU
Views: 1247 InvestingTip
Key Things to Know about Fixed Income ETFs | Fidelity
 
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Find out more about exchange-traded funds with us at the https://www.fidelity.com/learning-center/investment-products/etf/overview To see more videos from Fidelity Investments, subscribe to: https://www.youtube.com/fidelityinvestments Facebook: https://www.facebook.com/fidelityinvestments Twitter: https://www.twitter.com/fidelity Google+: https://plus.google.com/+fidelity LinkedIn: https://www.linkedin.com/company/fidelity-investments ------------------------------------------------------------------------------------------ Fixed income can be a critical part of nearly every well-diversified portfolio. Used correctly, fixed income can add diversification and a steady source of income to any investor’s portfolio. But how do you choose the right fixed-income ETF? The key to choosing the right fixed-income ETF lies in what it actually holds. U.S. bonds or international bonds? Government securities or corporate debt? Bonds that come due in two years or 20 years? Each decision determines the level of risk you’re taking and the potential return. There are many types of risks to consider with bond investing. Let’s talk more about two in particular: Credit risk and Interest-rate risk. Determining the level of credit risk you want to assume is an important first step when choosing a fixed-income ETF. Do you want an ETF that only holds conservative bonds—like bonds issued by the U.S. Treasury? Or do you want one holding riskier corporate debt? The latter may pay you a higher interest rate, but if the company issuing the bond goes bankrupt, you’ll lose out. ETFs cover the full range of available credit. Look carefully at the credit quality composition of the ETFs underlying holdings, and don’t be lured in by promises of high yields unless you understand the risks. Bonds are funny. Intuitively, you would assume that higher interest rates are good for bondholders, as they can reinvest bond income at higher prevailing interest rates. But rising interest rates may be bad news, at least in the short term. Imagine that the government issues a 10-year bond paying an interest rate of 2%. But shortly thereafter, the U.S. Federal Reserve hikes interest rates. Now, if the government wants to issue a new 10-year bond, it has to pay 3% a year in interest. No one is going to pay the same amount for the 2% bond as the 3% bond; instead, the price of the 2% bond will have to fall to make its yield as attractive as the new, higher-yielding security. That’s how bonds work, like a seesaw: As yields rise, prices fall and vice versa. Another important measure to consider when looking at interest rate risk is duration which helps to approximate the degree of price sensitivity of a bond to changes in interest rates. The longer the duration, the more any change in interest rates will affect your investment. Conversely, the shorter the duration, the less any change in interest rates will affect your investment. Let’s review a few other considerations when looking at fixed income ETFs. First, expense ratios: Because your expected return in a bond ETF is lower than in most stock ETFs, expenses take on extra importance. Generally speaking, the lower the fees, the better. Second, tracking difference: It can be harder to run a bond index fund than an equity fund, so you may see significant variation between the fund’s performance and the index’s returns. Try to seek out funds with low levels of tracking difference, meaning they track their index well. Finally, some bonds can be illiquid. As a result, it’s extra important to look out for bond ETFs with good trading volumes and tight spreads. There are other factors to watch for too, but these are the basics. ETFs can be a great tool for accessing the bond space, but as with anything, it pays to know what you’re buying before you make the leap. Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, Rhode Island, 02917 723251.2.0
Views: 52266 Fidelity Investments

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