Video

great

Ok this terminology is really confusing me about interest rates. You said at the start of the video "interest rates/yields". And you have maintained that. So interest rate is a different concept and yield is a different concept. In fact, here the yield is yield to maturity. You are saying that when an investor's required rate of return goes down, the interest rate (amount of returns) a bond gives goes down as well, which is confusing. Are you saying that because the investor's required rate of return goes down, the price of the bond goes up, so when you reinvest, you have to spend more money to purchase a new bond and so the returns you get will not be high enough because of the increased purchase price? Or is there something else that just makes people issue lower coupon payment bonds because of lower yield to maturity somehow?

So basically current yield is the return that the investment actually makes in a year. And yield to maturity is the investor's required rate of return. And current yield will keep reducing to ultimately match yield to maturity because an above-par bond price will move downwards towards par thanks to market correction. Alright, let's see if I can understand reinvestment risk now.

Hopefully this lets me understand your interest rate risk and reinvestment risk video now. I didn't think in the direction of bond prices which was helpful. But I keep getting confused in current yield and yield to maturity. And then people start saying stuff like interest rate went up and I start thinking about bank interest rates going up instead of an investor's required rate of return. My mind is a mess right now lol. Edit: Wait you have a video on that too what the heck. Actual life saver.

4:00 if the odds of the unexpected gain equal the odds of the unexpected loss and the amounts are the same(40k each), shouldn't they cancel each other and still net you the original 320K expected?

Thank you so much

Thanks for easy explanation!

Thank you for this video! But I keep getting stuck at the EBIT(1+t) calculations. Could you kindly send me the link to the video where you explained this

Excellent explanation - thanks

Thank you Professor Ikram! Very helpful and easy to follow.

Hello, excellent video as always!!! I have one question. In the end where we find that, when we sell after 1 year, our return is 4,92%...does that mean we would NOT want to sell? For the reason that if we held the bond to maturity we would have 5,32% > 4,92% ???

Thank you so much for your clarification

Question. So does this include the standard deduction? For example if the taxes owed are 33000 would I then subtract the standardized deduction for whatever that year is? 33000-14000 for example would be 19000 left over that I would actually owe?

Quality work as always, Professor!

Thank you🙌

Thanks so much, I was doing but I couldn't find the formula for the last tax rate, thanks a lot!

Thank you!

great stuff

Soo good!

thank you keep posting. you have a special talent for explaining!!

Thank you so much sir!! I’m self learning for Cfa exam being a non finance major - your videos are incredibly helpful!! Please keep sharing valuable knowledge!

Amazing sir thank you!!!

Thank you so much! You are breaking the concepr down in a much more understandable way!!

1:00

Don't let this setback define your trading journey. Keep working hard and striving for success.

Great job

Great video, well explained!

How do you start it to look similar to that I'm currently studying npv in school

Keep up the great work Professor! You’ve been super consistent with uploading 👍🏼🥳

Incredible and very good explanation. Great teacher! :-)

Thank you for this! How about when the annuity actually grows? How do we introduce the growth rate to this calculation?

at 1:57 could you please tell by which formula you arrived at 24,761.90 value?

2:00

Better than the rest🎉🎉

I hate knowing im missing something but the step by step instructions you give tells me ppl like you are missing from the world and we need more people like you thank you.

Excellent and clear explanation! Thanks!

Great video !!!

For bonds paying semi annually, can we consider the discount rate as 10% and coupon rate as 80 while considering the maturity as 7 years? will that make any difference while calculating.

really good explanation

i was stuck on a problem for hours and couldn't get the right answer. 5 minutes into your video and I solved it. what an absolute legend. you earned a new subscriber!!

That was soooo helpful, thank you! You explain good!

Great explanation

Just came across this video, great way to think about financial planning. You were my favorite prof at ASU👍👍

Professor Ikram, thank you so much for the explanation. Could you share the formula you mentioned at 2:10? I think it's out of the recorded screen.

so which is better? the present value being higher than the face value or the present value being lesser than the face value? Please explain.

thanks man really solve my issue

This is so helpful and explained very clearly. Thank you so much. Would this apply to 2024 Taxes, or have the brackets changed? Also do these taxes cover social Security?

Herrera Corporation has total sales of $3,110,400 and costs of $2,776,000. Depreciation is $258,000 and the tax rate is 21 percent. The firm is all-equity financed. What is the operating cash flow? Can you please explain this calculation to me

does the formula to compute the value of an option change if the NPV without option is negative ? thank you

thanks for the video, any way you can share the template?