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3 Minutes! Bond Valuation Explained and How to Value a Bond

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OMG wow! Clicked here http://mbabullshit.com I'm shocked how easy, bond valuation video.. What is a Bond? Basically, a bond is a certificate which proves that a company borrowed money from you and now owes you money. Owning a bond is a way to earn interest payments instead of putting your money in a bank. Therefore, if a bond can give you high interest coupon payments compared to bank interest payments, a bond value should be high. On the other hand, if a bond will give you small coupon payments compared to bank interest, the bond value should be low. A bond can be bought either from the original company which issues the bond, or from people who already bought the bond from the corporation, but who want to sell the bond before it expires because they don’t want to wait too long before they get back their original investment So to find the theoretical value of a bond, we need to think about the bond’s interest coupon payments compared to bank interest payments, the bond’s face value, and the length of time before maturity when you get back the full face value of the bond. Sears Bond photo credit: Tom Spree via Wikipedia Creative Commons
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Text Comments (21)
Kartik Saini (1 year ago)
👍👌
MBAbullshitDotCom (1 year ago)
:thumbs up
Srini Krish (1 year ago)
you rock man, i started with one video for finance and you almost covered everything. Thank you , it wud have taken me hours to learn and understand by myself.
MBAbullshitDotCom (1 year ago)
glad I saved you hours!
what do you consider the safest way to hide money for about 12 years with interest given the profit is less important than the secured return of original capital
MBAbullshitDotCom (1 year ago)
My opinion on bitcoin is simple. It could go to ZERO, or it could go to 10k or 100k or sky's the limit. It's like investing in options: If you lose, you lose 100%, but if you win, you *could* win 1,000%; but the difference is that bitcoin has no "expiration date" (with an option investment, once it hits expiration without a profit for you, you lose your money. With bitcoin you could just wait it out as value *might* recover). Absolutely no way to predict based on years or dates (like 2019 as you mention).
MBAbullshitDotCom (1 year ago)
No idea on the safest way but New Zealand banks have the highest interest rates in the developed world, close to 5% per year and as a foreigner your "tax" on interest income is only 2% (meaning out of $100 interest income, they'd take only $2) but it's called AIL instead of tax. Of course, you'd bear the risk of NZ dollar going up and down in value compared to your home country currency, and you might still be responsible to pay tax to your home country, depending on your home country's laws.
any opinion on the future of bitcoin somewhere around 2019
thank you
MBAbullshitDotCom (1 year ago)
welcome
James Perry (1 year ago)
Hey that was super ez Thank u friend.
MBAbullshitDotCom (1 year ago)
Glad you find it ez!
Please anyone solved this question. Very urgent! SUPPOSE YOU ARE LOOK AT A BOND THAT HAS A 9% ANNUAL COUPON PAYABLE SEMIANNUALLY AND A FACE VALUE OF 5000. THERE ARE 10 YEARS TO MATURITY. WHAT WOULD BE PRICE OF BOND IF ITS YIELD TO MATURITY IS (I) 10%, (II)9% AND (III) 8% RESPECTIVELY? COMMENT ON THE RESULT.
Ayejax (2 years ago)
coupon payments?
ItsAlwaysGod oClock (3 years ago)
Is bond repayment guaranteed?
ItsAlwaysGod oClock (3 years ago)
+MBAbullshitDotCom Jeepers.  I'm not a big gambler, which you apparently have to be to enjoy being in the stocks/bonds game.  This is not boding well. :-C. 
MBAbullshitDotCom (3 years ago)
+ItsAlwaysGod oClock Supposedly "yes" but in reality "no." A company which issues a bond guarantees it, but if that company collapses (even big companies like Lehman Brothers collapsed in 2008) then they can't repay it.
Rajat Agrawal (3 years ago)
Very nice use of animation to explain the concept. Just brilliant, you've got a subscriber!
MBAbullshitDotCom (3 years ago)
+Rajat Agrawal thanks for the sub!
Shakaama (4 years ago)
no i want a full explanation for my CFA exam :)
MBAbullshitDotCom (4 years ago)
+shakaama click on my username and see my other longer videos

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