Bond Pricing, Yield to Maturity, and Duration using Microsoft Excel

This video covers the following learning objectives:

• Price Bonds:

  • Understand the fundamental concept of bond pricing.

  • Calculate the present value of future cash flows (coupon and principal repayments) to determine bond prices.

• Calculate Yield to Maturity (YTM):

  • Define yield to maturity and its significance for bond investments.

  • Use Excel to accurately calculate YTM based on bond price, coupon rate, face value, and maturity.

• Calculate Duration:

  • Define bond duration and explain its importance in measuring interest rate risk.

  • Use Excel to compute Macaulay and Modified Duration, demonstrating bond sensitivity to changes in interest rates.

• Integrate All Concepts in a Comprehensive Example:

  • Practically apply bond pricing, yield to maturity, and duration calculations in a unified, realistic scenario using Excel.