Finance Theory — 4.5: Bond Valuation

Описание: In 2022, investors holding "safe" U.S. Treasury bonds lost over 12%—their worst year in decades. How can something "risk-free" lose money? This video reveals one of the most important relationships in finance: the inverse relationship between bond prices and interest rates. You'll learn to value any bond yourself using time value of money principles.

📚 Key concepts covered:
• Bond valuation as time value of money applied to fixed, known cash flows
• Why bond prices move opposite to interest rates (it's mechanical, not mysterious)
• Coupon bonds vs. pure discount bonds—different arrangements of the same principle
• How STRIPS decompose coupon bonds into individual discount bonds
• The pricing formula P = F/(1+r)^t and how to use it
• Reading bond prices as market forecasts of future interest rates

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📖 ORIGINAL SOURCE
This video distills concepts from academic finance lectures on fixed income securities.
Source:    • Ses 4: Present Value Relations III & Fixed...  

All credit for the original educational content belongs to the original creator. This video aims to make these important concepts more accessible through condensed presentation.