SECURITIES MATH: CALCULATING YIELDS
SUMMARY
This module enables participants to identify and calculate yields of securities in the short and long–term markets. The analysis of price sensitivity to interest rate changes is included. The construction and interpretation of yield curves as a tool of financial decision–making is reviewed.
OBJECTIVES
Upon completion of this module, participants will be able to:
1. Identify the sources of yield quotes in the financial press and in official publications.
2. List the uses of yields by issuers and investors.
3. Calculate discounts and yields of short–term discount instruments.
4. Calculate yields of interest–bearing instruments of the short–term primary and secondary markets.
5. Calculate prices given yield quotes for short–term instruments.
6. Calculate yields of long–term coupon and zero–coupon instruments.
7. Identify and calculate nominal and effective yields.
8. Compare yields in the U.S. market with yields in the Euromarket.
9. Calculate the duration of securities.
10. Construct and interpret yield curves.
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