Calculating the Yield of a Zero Coupon Bond

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This video demonstrates how to calculate the yield-to-maturity of a zero-coupon bond. It also provides a formula that can be used to calculate the YTM of any zero-coupon bond.
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Опубликовано:

21 окт 2024

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Комментарии : 25

@TaxTimeForever 3 месяца назад

I always find myself coming back to Edspira. Thank you so much; you are a true legend!

@mechagotenks3169 7 лет назад

OH MY GOD THANK YOU! YOU LITERALLY JUST SAVED MY LIFE BECAUSE THE BOOK MADE IT SO COMPLICATED AND YOU EXPLAINED SO SIMPLE.THANK YOU!

@Edspira 7 лет назад

No problem. Glad to help!

@kevinyu8320 7 лет назад

Same here. Your video helped me refresh my memory since my corporate finance book explains it so much more complicated than my accounting textbooks :x Thank you!!!

@changeme454 3 года назад

The way of explaining is very convincible! The first starts with very elementary math and then the continuation is just epic.

@red2838 Год назад

Great Video! The fact I actually asked myself what would happen if the zero bond would have a longer time to maturity…

@showkatahmadlone7154 2 года назад

Thankuuu sir For the concept clarification ❤❤❤

@ericorenato88 5 лет назад

I am having a problem when putting it into months. for example 16 months.

@sohaabdullrahman6727 8 лет назад

what if the yield was on 3 mth, with 67 days to maturity, how we calculate that

@gstlb 8 месяцев назад

I think the n in the final equation would be 4, that is, 1 / .25 but remember the YTM is for a year not 3 months

@frankrizzo7781 2 года назад

What would the equation be if face value is the unknown. I can't remember how to solve for ^1/n. YTM +1=(FV/DISCOUNT)^1/n In 1982 at of 10 I received 5k and talked my father into buying 10 year zero coupons that paid 12.99 %. I want to figure out thr discount on the 1000 dollar bonds.

@abdurehmankhan1333 Год назад

this is increadibe

@Luke-nh5tu 5 лет назад

Wouldn't it be the same if you take initial 5% rate divided that by the number of years ? Instead of making the whole new calculation.. just curious if it would be accurate

@unityaboriginelove6595 2 года назад

I was thinking the same thing. take the 5/3 = 1.6%

@summitacharya3278 2 года назад

What if Vd is not given How to calculate rate of return?

@ilad3689 5 лет назад

thank you so much

@summitacharya3278 2 года назад

Sir how to find maturity in redeemable bond

@supercupcake119 7 лет назад

How would u calculate it If you were only given a par value, a current market rate, semi- annual compounding, and a 5 yr period?

@Edspira 7 лет назад

I have a seperate video that explains this in more detail: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-O2W935hzYpQ.html. Your formula is: Zero Coupon Bond Value = F/(1+r)^t where r=market rate divided by 2 since it is paid semi-annually, and t=5x2 (10 payment periods since it is semi-annual). Also, a zero coupon bond is also known as a discount bond. I hope this helps. Good luck!

@lurch4872 7 лет назад

What happens if interest rates become negative ?How do you calculate the value of the Bond then ?

@arieskatkov467 6 лет назад

same thing

@arieskatkov467 6 лет назад

you should have more subs

@eddieteabagify Год назад

worthless info unless you buy on the day of issuance. what happens when you buy on the secondary market 36 days after it was issued.

@Edspira Год назад

Eddie, I have an entire playlist called "chapter 14: long-term liabilities" (www.edspira.com/index-financial-accounting). It sounds like you were interested in the videos on amortizing a bond discount and premium. Best of luck in your studies!