How are bond prices determined? #LLAShorts 77



DEMAT ACCOUNT:
……………………………………………..
COURSES:
……………………………………………..
QuickPayroll:
……………………………………………..
Explained in 1 Minute
How are bond prices determined?
……………………………………………..
Newsletter:
Instagram:
Twitter:
Telegram: @JoinLLA
……………………………………………..
#LLA #YTM #Bonds #LLAShorts 77

source

30 Comments

  1. Reel k starting mey hi Capital gains wala Rs. 18 nahi dikhana chahiye tha. Usse confusion hua. Agar wo tab dikhate jab aapne mention kiya. Tab samajh mey naturally ajata k ye extra Rs. 18 ka capital gains kahan se aya. But cool. In the end, samajh toh agya.

  2. A simpler explanation:

    You have purchased a debt (think of it as you gave a loan to a company) with face value (similar to principal), coupon rate (similar to interest rate)10% annually, and maturity period of 2years.

    1 year has passed and you have received your first interest of 100/-. Now you get to know that similar debts have been circulated by the company at 8% coupon rate. So, a new buyer in the market has 2 options to buy a debt: first option is to buy from the market itself at 8% coupon rate, and second option is to buy it from you at 10% coupon rate. He will buy from you only if he makes a profit more than the current coupon rate of the market, which is 8%.

    Assume you sold the debt to the buyer at x/- rupees. After one year, when the debt matures, he receives the face value plus the interest which is (1000+100)/- = 1100/-. His profit becomes (1100-x)/-. The profit percentage:

    (1100-x)/x > 8%
    => x < 1018.518
    => x = 1018/-

    Profit % = ((1100-1018)/1018)*100%
    =8.05%

    Thus, 1018/- is the maximum price at which a buyer is willing to buy the debt from you so that he makes a profit (8.05%) more than 8%.

    For you, your total investment was 1000/- and your returns are (100+1018)= 1118/-. Profit:

    (118/1000)*100% = 11.8%

  3. Despite rising bond yields and falling stock prices, the markets remain uncertain about whether the Federal Reserve will maintain its objective of raising interest rates until inflation is subdued. As I contemplate whether to sell my $401k in equities, what's the most effective strategy for capitalizing on the current downturn in the market?

  4. Simple concept of present value but your target audience won't understand this and gonna treat youtubers like some finance geeks and math wizards🤦🤦
    No hate but this just shows what students are taught in school and colleges and how weak their basic are

Leave a Reply

Your email address will not be published. Required fields are marked *

You might like

© 2026 Cantinho do Vídeo - WordPress Video Theme by WPEnjoy