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Banking Essentials - Part I

This pathway will walk us through the basics of banks, starting with some of the different types and their main functions, then starting to look at the regulation faced by the banks, both before and after the Global Financial Crisis.

Greenwashing

Greenwashing is the act of distributing false information about something being more environmentally friendly than it actually is.

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Tackling the Cost of Living Crisis

In this video, Max discusses the cost-of-living crisis currently enveloping the UK. He examines its impact on households as well as the overall economy.

CSR and Sustainability in Financial Services

In the first video of this two-part video series, Elisa introduces us to sustainability. She begins by looking at the difference between sustainability and corporate social responsibility, two terms that can be easily confused.

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Banking Essentials - Part I

This pathway will walk us through the basics of banks, starting with some of the different types and their main functions, then starting to look at the regulation faced by the banks, both before and after the Global Financial Crisis.

Greenwashing

Greenwashing is the act of distributing false information about something being more environmentally friendly than it actually is.

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Plans & Membership

Our Platform

Expert led content

+1,000 expert presented, on-demand video modules

Learning analytics

Keep track of learning progress with our comprehensive data

Interactive learning

Engage with our video hotspots and knowledge check-ins

Testing & certification

Gain CPD / CPE credits and professional certification

Managed learning

Build, scale and manage your organisation’s learning

Integrations

Connect Finance Unlocked to your current platform

Featured Content

More featured content

Tackling the Cost of Living Crisis

In this video, Max discusses the cost-of-living crisis currently enveloping the UK. He examines its impact on households as well as the overall economy.

CSR and Sustainability in Financial Services

In the first video of this two-part video series, Elisa introduces us to sustainability. She begins by looking at the difference between sustainability and corporate social responsibility, two terms that can be easily confused.

More featured content

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Present Value Calculations (Bonds)

Present Value Calculations (Bonds)

Abdulla Javeri

30 years: Financial markets trader

In this video, Abdulla outlines the formula used in bond markets discounted for multiple periods. 

In this video, Abdulla outlines the formula used in bond markets discounted for multiple periods. 

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Present Value Calculations (Bonds)

4 mins 4 secs

Overview

The value of the formulae used in bond markets to discount for multiple periods relies on the appropriate inputs. And there are many. Incorrect inputs will result in an incorrect PV and valuation.

Key learning objectives:

  • Understand how different rates affect the present value calculations of cash flows

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Summary

Understand how different rates affect the present value calculations of cash flows

The value of the formula used in bond markets to discount for multiple periods relies on the appropriate inputs. And there are many. A simplified version of the formula is as follows:

PV = CF/(1+rp)periods

To find the present value of a given cash flow, use the term on the right of the division sign to discount it. Investors need to make decisions in respect of the interest or discount rate and the time in the power (or exponent). Incorrect inputs will result in an incorrect PV and valuation.

The choices in terms of the interest rate are between nominal annual rates, periodic rates and effective annual rates. If we apply a periodic rate, is it a nominal annual rate divided by frequency of compounding periods in a year, or an effective annual rate divided by frequency? For the power or exponent, the choice is between time in periods or in years.

Correct inputs will yield correct numbers. Any other combination will potentially result in valuation errors and therefore losses.

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Expert
Abdulla Javeri

Abdulla Javeri

Abdulla’s career in the financial markets started in 1990 when he entered the trading floor of the London International Financial Futures Exchange, LIFFE, and qualified as a pit trader in equity and equity index options. In 1996, Abdulla became a trainer for regulatory qualifications and then for non-exam courses, primarily covering all major financial products.