TAILIEUCHUNG - Lecture Financial institutions, markets, and money (9th Edition): Chapter 5 - Kidwell, Blackwell, Whidbee, Peterson

Chapter 5 - Bond prices and interest rate risk. The purpose of this chapter is to explain how interest rate movements affect the prices of assets and liabilities of investors and financial institutions. We focus on bonds because their behavior in the face of interest rate changes is similar to that of other financial instruments. | Power Point Slides for: Financial Institutions, Markets, and Money, 9th Edition Authors: Kidwell, Blackwell, Whidbee & Peterson Prepared by: Babu G. Baradwaj, Towson University And Lanny R. Martindale, Texas A&M University CHAPTER 5 BOND PRICES AND INTEREST RATE RISK The Time Value of Money: Investing—in financial assets or in real assets—means giving up consumption until later. Positive time preference for consumption must be offset by adequate return. Opportunity cost of deferring consumption determines minimum rate of return required on a risk-free investment— Present sums are theoretically invested at not less than this rate; Future cash flows are discounted by at least this rate. Time value of money has nothing primarily to do with inflation. Inflation expectations affect discount rate, but Deferred consumption has opportunity cost by definition. Future Value or Compound Value The future value (FV) of a sum (PV) is FV = PV (1+i)n where i is the periodic interest rate .

• Tài chính doanh nghiệp
• Financial system
• Financial markets
• Commercial banking
• Financial institutions
• Bond prices
• Interest rate risk
• Time value of money
• Lecture Accounting and financial system
• Financial statements
• Interpretation of financial statements
• Financial records
• Government grants
• Financial inclusion and growth of Indian banking system
• Financial inclusion of Indian banking system
• Growth of Indian banking system
• Challenges for financial inclusion
• Financial inclusion plays
• The financial system
• The payments system
• Interest rates
• Rates of return
• The stock market
• Financial market efficiency
• Determining interest rates
• Financial Instruments
• Modern financial system
• Flow of funds
• Financial claims
• Modern financial system
• Impact of globalisation
• Functions of the financial system