Bonds / Rates / Interests

Bonds and Bond Yields

What is a bond? Who issues a bond and why?

LIBOR (London Interbank Offered Rate)





The LIBOR scandal: what it means for you

Interest Rate Swaps

Interest rate swaps are derivative instruments commonly used by sophisticated investors to allow cash flows on interest-earning securities or loans to be exchanged. One of the most common examples of an interest rate swap is when two parties have different terms on loan agreements (e.g. fixed vs variable interest rates), and one party undertakes payments linked to short-term floating interest rates (such as LIBOR) in order to recieve fixed payments. The counterparty to this transaction then undertakes the fixed payments.

According to the Bank for International Settlements, the notional amounts outstanding for interest rate swaps were upwards of $364 trillion at the end of 2010, dwarfing the OTC markets for other types of derivative contracts. But how do these interest rate swaps work?

Treasury Bond Prices and Yields
When you buy a U.S. Treasury Security, you’re essentially giving a loan to the government. When these bonds are transacted, they have varying yields based upon how much a buyer is willing to pay.

The Yield Curve

Yield curves help investors understand the relationship between bonds of differing time horizons to maturity. Understanding the yield curve is important to investors because easily comparing yields allows them to understand their return on investment and make investment decisions based upon these future payouts.

Compound Interest

Introduction




The Rule of 72

Credit cards and loans

Annual Percentage Rate (APR) and Effective APR



Institutional Roles in Issuing and Processing Credit Cards




Payday Loans


Payday Loans: How Payday lending works

Compund interest and e

part 1



part 2



part 3



part 4

Time Value of Money



Introduction to present value



Present value 2



Present value 3



Present value 4 (and discounted cash flow)

E

e and compound interest



e as a limit



Formula for continuously compounding interest