Bond Pricing Concepts and Calculations

Professor Capco guides viewers through the process of bond valuation, explaining the formula used to calculate bond prices. The tutorial covers key concepts such as coupon rate, yield to maturity, and the calculation of coupon payments. Detailed steps are provided for applying the formula, including the use of a financial calculator. The video concludes with a call to action for viewers to subscribe for more educational content.

What is the main focus of the video tutorial?

• Calculating the price of a bond

• Understanding stock market trends

• Learning about mutual funds

• Exploring real estate investments

What is another term for the par value of a bond?

• Yield to maturity

• Coupon rate

• Face value

• Market value

What is the coupon rate in the given bond problem?

• 5%

• 10%

• 7.5%

• 3.5%

How often are the coupon payments made in this example?

• Quarterly

• Annually

• Bi-annually

• Monthly

What is the yield to maturity also known as?

• Discount rate

• Market rate

• Coupon rate

• Interest rate

Which formula component represents the coupon payment?

• C

• F

• r

• T

What is the face value of the bond in this example?

• $500

• $1500

• $750

• $1000

How is the yield to maturity expressed in the formula?

• As a whole number

• As a fraction

• As a percentage

• As a decimal

What is the first step in calculating the bond price?

• Identify the number of periods

• Determine the market rate

• Calculate the coupon payment

• Find the face value

How is the coupon payment calculated?

• Coupon rate multiplied by face value

• Coupon rate multiplied by market rate

• Market rate divided by face value

• Face value divided by coupon rate