Floating Rate Bond PowerPoint PPT Presentations

The seven-year-long GOI Bonds, also known as the RBI Floating Rate Savings Bonds 2020 (Taxable) have a current taxable interest rate of 7.35%. These are referred to as floating-rate bonds because of how the interest rate on the bond relates to the NSC rate. In accordance with the scheme criteria that were released on June 26, 2020, these variable rate bonds will continue to have a ROI that is 0.35% greater than the existing NSC rate. The coupon/interest rate on these bonds is subject to change if NSC's ROI changes on January 1 and July 1 of each year.

The GOI Bonds, also known as the RBI Floating Rate Savings Bonds 2020 (Taxable), now provide a taxable interest rate of 7.35% over seven-year duration. Because the interest rate on these bonds is based on the NSC rate, they are known as floating-rate bonds. These variable rate bonds will continue to earn a higher ROI of 0.35% than the current NSC rate in compliance with the scheme criteria that were published on June 26, 2020.

A floating rate note (FRN) is a floater issued by a corporate or agency borrower. ... It is natural to set a floor of zero for inverse floaters. ...

... interest rate for calculating interest payments = annual coupon/face value ... Debt secured by a mortgage on real assets (property, but not cash or ...

Debenture. Par value. Face value. Coupon rate. Indenture. Zero-coupon bond. Convertible bonds ... Short-term interest rates Risk free rate - yields on treasury bills ...

Central banks thought they would stop trading in the foreign exchange for a ... Self-fulfilling devaluation crises may occur under fixed rates. ...

Strictly Private and Confidential Importance of Domestic and Regional Bond Market Development - Emerging Markets: Formulation of Strategies for entering domestic and ...

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Bonds and Bond Valuation * 6.4 Bond Ratings * 6.5 Some Bond History and More Bond Features Corporate bond features have gone through some major changes over the years.

Consider a bond with a coupon rate of 10% and coupons paid annually. ... Mortgage secured by real property, normally land or buildings. Debentures unsecured ...

Valuing a Discount Bond with Annual Coupons ... YTM with Semiannual Coupons ... Coupons may have a 'collar' the rate cannot go above a specified 'ceiling' or ...

A floating rate note has variable coupons, depending on a money market reference rate, such as LIBOR, plus a floating spread. When interest rate raises, the coupons of a FRN increases in line with the increase of the forward rates, which means its price remains relatively constant. Therefore, FRNs bear small interest rate risk. On the other hand, FRNs carry lower yields than fixed rate bonds of the same maturity. They also have unpredictable coupon payments. This presentation gives an overview of FRNs valuation. You can more information at http://www.finpricing.com/lib/FiFloatingBond.html

CFt = interest or principal at time t. t = time period in which cash flow is received. ... The formula can be modified to work well for large interest changes and the ...

Indiana Bond Bank loaned the proceeds to the Indiana Municipal Gas Purchasing ... Citizens Gas, City of Batesville and Town of Lapel entered into long-term supply ...

Chapter 6. Bonds and Bond Pricing. Real Assets versus ... Features Table 6.1, ... Amortization schedule (Table 6.2) shows implied interest payments each ...

A cap is a collection of call options on interest rates (caplets) ... ZC = 104 * 0.9512 = 98.93. Derivatives 10 Options on bonds and IR |24. 2-year cap ...

Derivatives Options on Bonds and Interest Rates Professor Andr Farber Solvay Business School Universit Libre de Bruxelles Caps Floors Swaption Options on IR ...

Long-term bonds have more price risk than short-term bonds ... Normal upward-sloping, long-term yields are higher than short-term yields ...

Mortgage secured by real property, normally land or buildings. Debentures unsecured ... Moody's Ba, B, Caa and Ca. S&P BB, B, CCC, CC ...

the floating and fixed interest rate calculations are for a pre-decided principal ... Assuming a pre tax spread of 2.00% p.a., post tax spread on the trade is 1.23% p. ...

A callable bond is a bond in which the issuer has the right to call the bond at specified times from the investor for a specified price. At each callable date prior to the bond maturity, the issuer may recall the bond from its investor by returning the investor’s money. The underlying bonds can be fixed rate bonds or floating rate bonds. A callable bond can therefore be considered a vanilla underlying bond with an embedded Bermudan style option. Callable bonds protect issuers. Therefore, a callable bond normally pays the investor a higher coupon than a non-callable bond. This presentation gives an overview of callable bond and valuation model. You can find more presentations at http://www.finpricing.com/productList.html.

A puttable bond is a bond in which the investor has the right to sell the bond back to the issuer at specified times for a specified price. At each puttable date prior to the bond maturity, the investor may get the investment money back by selling the bond back to the issuer. The underlying bonds can be fixed rate bonds or floating rate bonds. A puttable bond can therefore be considered a vanilla underlying bond with an embedded Bermudan style option. Puttable bonds protect investors. Therefore, a puttable bond normally pays investors a lower coupon than a non-callable bond. This presentation gives an overview of puttable bond and valuation model. You can find more presentations at http://www.finpricing.com/productList.html.

3. Start from current term structure: arbitrage-free models. OMS 10 Options on bonds and IR ... Options on zero-coupons. Consider a 6-month call option on a 9 ...

Excursus: Yield To Maturity ... Excursus: Yield to Maturity. A $1000 treasury bond expires in 5 years. ... Excursus: Calculation of a Portfolio s Value. Value ...

Accrued Interest and 'dirty price' Example: find the price plus ... Convertible provision. Retractable and extendible (putable) bonds. Floating rate bond ...

Floater & Inverse Floater The inverse floater is a derivative security synthetically created from the fixed rate debt instrument as the underlying collateral.

Convertible notes/preference shares 27% and Listed corporate bonds/floating rate notes 26 ... LPT's and convertible notes/preference shares 30 ...

Interest Rate Derivatives Interest Rate Derivatives Swaps Forward Rate Agreements (FRAs): A one-period, future swap EuroDollar Futures Bond Options (Black-76) Caps ...

Interest Rate Derivatives Interest Rate Derivatives Swaps Forward Rate Agreements (FRAs): A one-period, future swap EuroDollar Futures Bond Options (Black-76) Caps ...

OID - original issue discount - example: zero-coupon bonds ... You avoid the problems associated with reinvestment of the annual coupons. ...

... Future Expected Cash Flows discounted by the. Required Rate of ... The cash flows are discounted (present value determined) using the market rate of interest. ...

Title: PowerPoint Author: Ding Jianping Last modified by: Ding Jianping Created Date: 4/20/2003 2:12:04 AM Document presentation format

If the Home Depot had more pricing power, it could consider using floating rate ... the coupons (interest payments) on the bond (loan) and the face value of ...

A bond that has received a rating of non-investment grade. ... Oil companies on the verge of filing for bankruptcy. History of Junk Bonds. 1980's ...

Eurocurrencies: domestic currencies of one country on deposit in 2nd country. ... Include: Yankee bonds (sold in US), Samurai bonds (Japan), & Bulldogs (UK). 8 ...

Exchange Rate Systems Free Float, Fixed and Mixed Definition FX Intervention occurs when CBs buy and sell FC with the intent to change St to a different StE.

Interest Rate Risk Finance 129

... a minimum or floor rate. When floating BBSW or BBSY sets between the cap and floor strike they pay ... One factor models only have once source of uncertainty ...

Overview Role of Rating Agencies What is a rating Why are ratings necessary Rating Agency methodology CMBS rating methodology Floating rate loan and single borrower ...

Explanations of the shape of the yield curve and why it changes shape over time. 8 ... View bonds as source of capital gains arising from changes in interest rates ...

A bond is a security that obligates the issuer to make ... Two cash flows to purchaser of bond: -B at time 0. F at time T. What is the price of a bond? ...

Bond Prices and Yields * * * * * * * Risk structure of interest rates Greater default risk, higher default premium Default premiums Yields compared to ratings Yield ...

Yield Curves ... yield curves seldom slope downwards! The Preferred Habitat Theory ... Began in the International Money Market of Chicago Mercantile Exchange in 1972. ...

Foreign political risks. 4. Flow (BOP) Approach. Forex as a ... rate reflect news. ... http://www.investavenue.com/article.html?ID=5761. 16. Forecasting ...

Exchange Rate Determination With focus on developing a framework for understanding changes in spot exchange rates Impact of Managed Foreign Exchange Regime on ...

In the very short-run, yes. Over sustained periods, no ... 2. Many goods and services are not traded: e.g. haircuts. Domestic Price Level. Trade Barriers ...

Non-US Bonds Chapter 9 Global Bond Markets internal bond market (national bond market) domestic bond market bonds from issuers domiciled in the country foreign ...

a Gospel Perspective Investments 6: Bond Basics Objectives A. Understand risk and return for bonds B. Understand bond terminology C. Understand the major types of ...

Convertible provision. conversion ratio. market conversion value. conversion premium ... Convertible example. conversion ratio = 25. market price of stock = $42 ...

Most Euro zone government bonds have annual coupons and Actual/Actual year fraction ... capital gain (for bonds trading in discount) or capital loss (for bonds trading ...

Derivatives Interest Rate Derivatives Professor Andr Farber Solvay Business School Universit Libre de Bruxelles

What is the bank's 1-year GAP with the auto loan? RSA1yr = $0. RSL1yr = $10,000 ... Cap (maximum) rate on a floating-rate loan ...

OID - original issue discount - example: zero-coupon bonds ... 1. It is best to buy into the bond market at the peak of an interest rate cycle. Because: ...

Not a focus of this class and sections in chapter 14 on these can be skipped. Features ... PB = Prices and Coupon Rates. Yield. Price. Yield Measures. Bond ...

lower exchange rate means Canadian assets have relatively higher returns and ... comparative statics are easy, interactions require a great deal of analysis ...

Quoted premium of 2 (P = $500) Managing the Maturity Gap. with a Eurodollar Futures Put ... of futures contracts that will make the value of a portfolio ...