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l2 47 valuing bonds with embedded options

This class was created by Brainscape user Steven Popovic. Visit their profile to learn more about the creator.

By: Steven Popovic
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Decks in this class (11)

a evaluate, using relative value analysis, whether a security is undervalued, fairly valued, or overvalued;
No deck description has yet been added by the author.
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b evaluate the importance of benchmark interest rates in interpreting spread measures;
No deck description has yet been added by the author.
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c describe the backward induction valuation methodology within the binomial interest rate tree framework;
No deck description has yet been added by the author.
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d calculate the value of a callable bond from an interest rate tree;
No deck description has yet been added by the author.
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e explain the relations among the values of a callable (putable) bond, the corresponding option-free bond, and the embedded option;
No deck description has yet been added by the author.
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f explain the effect of volatility on the arbitrage-free value of an option;
No deck description has yet been added by the author.
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g interpret an option-adjusted spread with respect to a nominal spread and to benchmark interest rates;
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h explain how effective duration and effective convexity are calculated using the binomial model;
No deck description has yet been added by the author.
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i calculate the value of a putable bond, using an interest rate tree;
No deck description has yet been added by the author.
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j describe and evaluate a convertible bond and its various component values;
No deck description has yet been added by the author.
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k compare the risk-return characteristics of a convertible bond with the risk-return characteristics of ownership of the underlying common stock.
No deck description has yet been added by the author.
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l2 47 valuing bonds with embedded options

  • Class purpose General learning

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