货币金融学11ge_PPT CH04_Mish11ge_EMBFM
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• Recognize the distinctions among yield to maturity, current yield, rate of return, and rate of capital gain.
• Interpret the distinction between real and nominal interest rates.
$100
$100
$100
$100
Year
0
PV
100
1 100/(1+i)
2 100/(1+i)2
n 100/(1+i)n
1-7
© 2016 Pearson Education Ltd. All rights reserved.
Four Types of Credit Market Instruments
$100 X (1 + i)n
1-5
© 2016 Pearson Education Ltd. All rights reserved.
Simple Present Value
PV = today's (present) value
CF = future cash flow (payment)
i = the interest rate
n = num ber of years = 1 $110
$100 = (1 + i)1 (1 + i) $100 = $110
(1 + i) = $110 $100
i = 0.10 = 10% For sim ple loans, the sim ple interest rate equals the
LV = loan value
– Why: a dollar deposited today can earn interest and become $1 x (1+i) one year from today.
1-4
© 2016 Pearson Education Ltd. All rights reserved.
Present Value
1-9
© 2016 Pearson Education Ltd. All rights reserved.
Yield to Maturity on a Simple Loan
PV = am ount borrow ed = $100 C F = cash flow in one year = $110
yield to m aturity
1-10 © 2016 Pearson Education Ltd. All rights reserved.
Fixed-Payment Loan
The same cash flow payment every period throughout
the life of the loan
1-3
© 2016 Pearson Education Ltd. All rights reserved.
பைடு நூலகம்
Measuring Interest Rates
• Present value: a dollar paid to you one year from now is less valuable than a dollar paid to you today.
1-2
© 2016 Pearson Education Ltd. All rights reserved.
Learning Objectives
• Calculate the present value of future cash flows and the yield to maturity on the four types of credit market instruments.
Let i = .10 In one year: $100 X (1+ 0.10) = $110 In two years: $110 X (1 + 0.10) = $121
or $100 X (1 + 0.10)2 In three years: $121 X (1 + 0.10) = $133
or $100 X (1 + 0.10)3 In n years
Chapter 4
The Meaning of Interest Rates
20-1 © 2016 Pearson Education Ltd. All rights reserved.
Preview
• Before we can go on with the study of money, banking, and financial markets, we must understand exactly what the phrase interest rates means. In this chapter, we see that a concept known as the yield to maturity is the most accurate measure of interest rate.
PV =
CF (1 + i)n
1-6
© 2016 Pearson Education Ltd. All rights reserved.
Simple Present Value
•Cannot directly compare payments scheduled in different points in the time line
• Simple Loan • Fixed Payment Loan • Coupon Bond • Discount Bond
1-8
© 2016 Pearson Education Ltd. All rights reserved.
Yield to Maturity
• Yield to maturity: the interest rate that equates the present value of cash flow payments received from a debt instrument with its value today
• Interpret the distinction between real and nominal interest rates.
$100
$100
$100
$100
Year
0
PV
100
1 100/(1+i)
2 100/(1+i)2
n 100/(1+i)n
1-7
© 2016 Pearson Education Ltd. All rights reserved.
Four Types of Credit Market Instruments
$100 X (1 + i)n
1-5
© 2016 Pearson Education Ltd. All rights reserved.
Simple Present Value
PV = today's (present) value
CF = future cash flow (payment)
i = the interest rate
n = num ber of years = 1 $110
$100 = (1 + i)1 (1 + i) $100 = $110
(1 + i) = $110 $100
i = 0.10 = 10% For sim ple loans, the sim ple interest rate equals the
LV = loan value
– Why: a dollar deposited today can earn interest and become $1 x (1+i) one year from today.
1-4
© 2016 Pearson Education Ltd. All rights reserved.
Present Value
1-9
© 2016 Pearson Education Ltd. All rights reserved.
Yield to Maturity on a Simple Loan
PV = am ount borrow ed = $100 C F = cash flow in one year = $110
yield to m aturity
1-10 © 2016 Pearson Education Ltd. All rights reserved.
Fixed-Payment Loan
The same cash flow payment every period throughout
the life of the loan
1-3
© 2016 Pearson Education Ltd. All rights reserved.
பைடு நூலகம்
Measuring Interest Rates
• Present value: a dollar paid to you one year from now is less valuable than a dollar paid to you today.
1-2
© 2016 Pearson Education Ltd. All rights reserved.
Learning Objectives
• Calculate the present value of future cash flows and the yield to maturity on the four types of credit market instruments.
Let i = .10 In one year: $100 X (1+ 0.10) = $110 In two years: $110 X (1 + 0.10) = $121
or $100 X (1 + 0.10)2 In three years: $121 X (1 + 0.10) = $133
or $100 X (1 + 0.10)3 In n years
Chapter 4
The Meaning of Interest Rates
20-1 © 2016 Pearson Education Ltd. All rights reserved.
Preview
• Before we can go on with the study of money, banking, and financial markets, we must understand exactly what the phrase interest rates means. In this chapter, we see that a concept known as the yield to maturity is the most accurate measure of interest rate.
PV =
CF (1 + i)n
1-6
© 2016 Pearson Education Ltd. All rights reserved.
Simple Present Value
•Cannot directly compare payments scheduled in different points in the time line
• Simple Loan • Fixed Payment Loan • Coupon Bond • Discount Bond
1-8
© 2016 Pearson Education Ltd. All rights reserved.
Yield to Maturity
• Yield to maturity: the interest rate that equates the present value of cash flow payments received from a debt instrument with its value today