CORRECTION: @4:23 we should be using the 2 year spot rate of 4.04%, not the 2 year par rate of 4%. 🔑 Join this channel to get access to perks & support my work: th-cam.com/channels/Akyj2N9kd0HtKhCrejsYWQ.htmljoin 🎓 Tutor With Me: 1-On-1 Video Call Sessions Available ► Join me for personalized finance tutoring tailored to your goals: ryanoconnellfinance.com/finance-tutoring/ 💾 Download Free Excel File: ► Grab the file from this video here: ryanoconnellfinance.com/product/financial-modeling-excel-spreadsheet-for-bootstrapping-spot-rates/
@@williama.rivera9414 if you're watching my videos just out of curiosity then this field might be your true calling! I'd imagine most people watch because the content is on an upcoming test. But if you're watching just for fun that is a sign you have a serious interest in this line of work in my opinion
Hi thanks for the video. i think you should make it clearer in the video of the correction you did in the comments. I was literally trying to make sense of that for 15 mins before I gave up and went to the comments. Anyways good work!!
If that was possible I absolutely would! Unfortunately, TH-cam doesn't allow you to make edits to videos that are already posted in that nature so I have to put corrections in comments and descriptions
How to deal with a zero coupon bond with a maturity of 0.5 years and a coupon bond whose coupon is paid in 0.75 years（say 4% annual compounded and mature in 1.75 years）
When the zero curve is upward-sloping, the spot rate for a particular maturity is greater than the par yield for that maturity. When the zero curve is downward-sloping, the reverse is true. Can u explain why it is so 😢
CORRECTION: @4:23 we should be using the 2 year spot rate of 4.04%, not the 2 year par rate of 4%.
🔑 Join this channel to get access to perks & support my work: th-cam.com/channels/Akyj2N9kd0HtKhCrejsYWQ.htmljoin
🎓 Tutor With Me: 1-On-1 Video Call Sessions Available
► Join me for personalized finance tutoring tailored to your goals: ryanoconnellfinance.com/finance-tutoring/
💾 Download Free Excel File:
► Grab the file from this video here: ryanoconnellfinance.com/product/financial-modeling-excel-spreadsheet-for-bootstrapping-spot-rates/
About to write a final, this refresher was amazing. Explained very well
Good luck Dylan!
For when we were calculating the Spot rate at t=3: Why did you discount the 2nd coupon with 4% instead of 4.04%?
Because I made a mistake 😢 4.04% was the correct rate to use. I'll update the pinned comment to reflect this. Good catch!
At 4:23 you should be using 4.04 not 4
Very good catch Lovekesh
@@RyanOConnellCFA why 4.04?
@@miguelravelo4523because it is the spot rate for 2 years
спасибо большое за понятное объяснение👍👍👍
Hahaha I always have a look at this video when revising Level 2 Fixed Income, Great Stuff!
Much appreciated and good luck on the test!
This is amazing. An awesome refresher. @Ryan
Very interesting subject. Thanks so much for sharing
Thank you for watching William! Are you a CFA candidate by chance?
Hi Ryan. At this moment, no. Maybe in the future. I like so much the Finance subject.
@@williama.rivera9414 if you're watching my videos just out of curiosity then this field might be your true calling! I'd imagine most people watch because the content is on an upcoming test. But if you're watching just for fun that is a sign you have a serious interest in this line of work in my opinion
Great video, why Spot rate is slightly higher than the par rate?
Thank you bro!
Happy to help!
Hi thanks for the video. i think you should make it clearer in the video of the correction you did in the comments. I was literally trying to make sense of that for 15 mins before I gave up and went to the comments. Anyways good work!!
If that was possible I absolutely would! Unfortunately, TH-cam doesn't allow you to make edits to videos that are already posted in that nature so I have to put corrections in comments and descriptions
@@RyanOConnellCFA no worries man, your videos are fantastic
@@kazijawadahmed6488 Thank you, I appreciate it!
How to deal with a zero coupon bond with a maturity of 0.5 years and a coupon bond whose coupon is paid in 0.75 years（say 4% annual compounded and mature in 1.75 years）
Explain , how to hedge portfolio?
Jaya, I will be making videos covering this topic in the future
When the zero curve is upward-sloping, the spot rate for a particular maturity is greater
than the par yield for that maturity. When the zero curve is downward-sloping, the reverse
is true.
Can u explain why it is so 😢
Make a video on binomial interest rate and backward induction process also.
I just put out a video on Binomial Interest Rate Trees. That video can be found here: th-cam.com/video/FMxqlZu1fww/w-d-xo.html
how did he get 96.08
3.92 + 104 / (1.04^2) = 96.08