What's new


  1. Nicole Seaman

    YouTube T4-29: Fixed Income: Yield to Maturity

    Financial Risk Manager (FRM, Topic 4: Valuation and Risk Models, Fixed Income, Bruce Tuckman Chapter 3, Returns, Spreads and Yields). Yield to maturity (aka, yield) is the single rate that discounts a bond's cash flows to a present value that matches the bond's traded (observed) price.
  2. Nicole Seaman

    YouTube T3-10b: Yield to Maturity: Brief explanation

    In case this is more helpful, I recorded a SHORTER version (trying to cut to the chase) of my previous video's explanation of bond yield (aka, yield to maturity). I make the same four (4) points about how to interpret that yield.
  3. Nicole Seaman

    YouTube T3-10: Yield to Maturity Interpretations

    Superficially, the yield to maturity (YTM, aka yield) simply inverts the usual time value of money (TVM) inputs by solving for the yield as a function of four inputs: face (future) value, coupon (payment), maturity (time), and current price (present value). But in terms of interpretation, I...
  4. Nicole Seaman

    P1.T4.907. The coupon effect and carry roll-down scenarios (Tuckman Ch.3)

    Learning objectives: Define the coupon effect and explain the relationship between coupon rate, YTM, and bond prices. Explain the decomposition of P&L for a bond into separate factors including carry roll-down, rate change, and spread change effects. Identify the most common assumptions in carry...
  5. Nicole Seaman

    P1.T4.906. Annuities and yield to maturity (Tuckman Ch.3)

    Learning objectives: Compute a bond’s YTM given a bond structure and price. Calculate the price of an annuity and a perpetuity. Explain the relationship between spot rates and YTM. Questions: 906.1. Exactly one year ago, Sally purchased a $100.00 face value bond that pays a semi-annual coupon...
  6. Nicole Seaman

    P1.T4.905. Gross versus net bond returns, bond spread and bond yield (Tuckman Ch. 3)

    Learning objectives: Distinguish between gross and net realized returns, and calculate the realized return for a bond over a holding period including reinvestments. Define and interpret the spread of a bond, and explain how a spread is derived from a bond price and a term structure of rates...
  7. F

    Interpretation of Yield-To-Maturity

    Hi, I have a question on the assumptions behind Yield-To-Maturity. I have read the Yield-To-Maturity (YTM) chapter on the Tuckman (chapter 3 on my edition) that explains why YTM is a measure of the realized return to maturity of a bond. My understanding of the explanation is as follow: If...
  8. Fran

    P1.T4.316. Tuckman's yield to maturity (YTM)

    AIMs: Define, interpret, and apply a bond’s yield-to-maturity (YTM) to bond pricing. Compute a bond's YTM given a bond structure and price. Explain the relationship between spot rates and YTM. Calculate the price of an annuity and a perpetuity. Questions: 316.1. Assume the following 2-year...