30 years: Risk management & derivatives trading
In this video, Lindsey will run through 4 questions related to the topics he has discussed in the fixed income unlocked series.
In this video, Lindsey will run through 4 questions related to the topics he has discussed in the fixed income unlocked series.
Subscribe to watch
Access this and all of the content on our platform by signing up for a 14-day free trial.
8 mins 47 secs
This video is a series of questions to test your knowledge on PV calculations.
Key learning objectives:
Identify the formula used to discount future cash flows
Applications of the formula
Access this and all of the content on our platform by signing up for a 14-day free trial.
Present value formula outlined below:
PV = CF1/(1+y) + CF2/(1+y)2 + CF3/(1+y)3 + ... + CFn/(1+y)n
What amount would we need to invest today, at the current yield, in order to generate that cashflow at that point in the future?
Hint: you just need the first term of the formula - PV = CF1/(1+y)
Question 3: Estimate what you think a 4 year bond, paying a 4% coupon, priced at 3% yield is worth. Hint: 1 every year for 4 years, discounted.
Use the following formula: PV = CF1/(1+y) + CF2/(1+y)2 + CF3/(1+y)3 + CF4/(1+y)4
Year | Cashflow | Discount Factor | PV |
0.5 | |||
1 | |||
1.5 | |||
2 | |||
2.5 | |||
3 | |||
3.5 | |||
4 |
Access this and all of the content on our platform by signing up for a 14-day free trial.
There are no available videos from "Lindsey Matthews"