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SIE Exam Bond Teeter Totter. Inverse Relationship of Interest Rates & Prices. Series 7 and 65 too!
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- Опубліковано 12 сер 2024
- • Series 7 Exam Prep "Fo... Ford Bond NOT James Bond
Time stamps:
00:00 Teeter totter versus Triangle. Teeter Totter takes into the interest rate relationship. Triangle does not
01:21 Flat line represents a bond at par. NY=CY=YTM(Basis)=YTC.
01:47 Ford Motor Company 8% Debenture, 10 years to maturity, callable in 5 years at par.
02:55 Nominal yield is also known as Coupon also known as fixed or stated rate of return
03:40 8% X 1,000 is $80 in annual interest paid in two semi-annual payments of $40
04:20 Current yield
05:30 Interest rates go up and the bonds goes down. INVERSE RELATIONSHIP!!!
06:00 Bond trading at 90% of par of $900
06:19 Nominal yield is lower than current yield which is lower than YTM(Basis) which is lower than YTC
06:55 Current yield is $80/$900=8.9%
07:30 YTM(Basis) is lower than YTC
08:19 Not likely bond will be called if interest rates are up from issuance
08:55 Bonds at par quoted on a yield to maturity basis. Quote lower of the YTM or YTC
10:10 Bond trading at premium. If interest rates go down bond price goes up.
10:40 Bond trading at 110% of par or $1,100
11:35 Current yield is $80/$1,100=7.3%
12:53 YTC is lowest yield. YTC is lower than YTM(Basis) which is lower than CY which is lower than NY
14:14 Use teeter to rank yields from low to high
ua-cam.com/video/K2cT-DBLaSQ/v-deo.html. Ford Bond NOT James Bond lecture.
8:32-40 great anthropology point there!
I never understood these kinds of bond yield diagrams…until NOW. This channel is a treasure trove! Taking my SIE this coming Saturday and am just trying to shore up my weak areas and round out my knowledge. You are truly a guru.
Glad to hear it. Intellectual ownership of the bond yield diagrams will get you points both on your SIE and your top off too
Dean, I just took my 65 today and passed! I usually never comment on videos but your content helped me so much I’m forever grateful thanks 🙏
Kudos on making your mark!! Always very gratifying when my videos contribute to test taking victories like yours. Thanks for making an exception and commenting to let me know. I appreciate it.
10-15 minute lectures. It’s simplifies it for me. Thank you so much
De nada.
I have struggled with understanding this line/chart for a while until today. It makes so much sense now to me. Great, how you explained it using the line. Thank you so much for your dedication and all you do.
Your understanding will certainly get you some points on your exam. Make sure you take time to enjoy Thanksgiving. Sending you good test vibes.
Happy Thanksgiving.
I prefer the 15 - 20 minutes, but love them all
Noted
I love the 15 minutes videos my drive to work isn’t long so I enjoy getting the full video in. The practice question are also helping me a lot.
Trying to the keep it mixed up with some shorter and some longer videos. Will be doing some more 15 minute videos.
I like the option of having both. One as a learning tool and the other as a refresher when I'm feeling unsure.
Thanks. Trying to keep a mix.
Thank you! Love the small quick ones that explain in detail. This helped me understand this concept.
Try to mix it up. Quick ones mixed in with the longer ones.
Loved this quick hit. After watching several of the longer vids. Thanks!
Trying to mix it up.
Amazing stuff! Would it be possible for you to do a video for everything that someone should put on their dump sheet to help them study?
Everyone's dump sheet should be their own. A simple Google search would return with several versions for inspiration
This was so helpful, thank you for your clear concise explanations.
Glad you found it helpful
my last thing to do before my exam then some practice questions on bonds, my weakest link. Thanks a bunch
De nada. Sending you good test vibes! You got this!
This is super helpful!
Glad you found it helpful
Thank you - that helped me.
De nada
Great lectures. I like the shorter lectures.
Been making more of them
Shorter videos are right to the point as well. Great video as usual.
Trying to mix it up. Glad you found it helpful.
Great video
Thx
Thanks!
Thanks for the super chat
Great video!
Thank you. Trying to add more of these 15 minute shorts to the channel.
I like the shorter, 15 minute, versions.
Heard
Smaller lectures are great!
Been mixing them up.
@@Series7Guru Thank you!
Dean, you commented that on the exam they may sometimes refer to the coupon or nominal yield, cy, ytm or true yield, ytc as "something we're not familiar with". Are there examples of what the exam might call these 4 that I'm not familiar with? Im other words how else might they express these 4 items on the exam to confuse me during the test?
Nominal yield = coupon=fixed or stated return. YTM=Basis.
Why are premium bonds more likely to be called than discount bonds?
Because they have higher coupons. Bonds with high interests are more likely to be called than bonds with lower coupons
I guess that's where I'm confused Dean. I think I was thinking of the bond teeter totter as being static and it's dynamic. So I was seeing the bonds at a discount as having a higher coupon so you'd want to refinance the higher rate but there was an event that caused them to get to that stage that I was missing
Quick Question Dean. When T-bonds selling at a premium are quoted, is the yield listed always YTM? Thanks!
Treasuries are not callable so they would never be quoted YTC. So yes always YTM.
@@Series7Guru Thank you so much for clearing that up for me 😊
the shorter is better
Cool