Financial Market Rates and FlowsThe first half of the book is devoted to the foundations for understanding interest-rate behavior: market equilibration, the mathematics of bond interest and money market yields, inflation, maturity, coupon rate, default risk, and bond price volatility. The remaining chapters use these foundations to explore a variety of derivative securities and their uses, the influence of taxes on interest-rate differentials, and the social allocation of capital in society. The institutional backdrop is presented in conjunction with concepts, not abstractly as separate chapters. This approach is more lively than the chapter-by-chapter treatment seen in most texts. |
Contents
The FlowofFunds System | 17 |
Foundations for Interest Rates | 29 |
Summary | 46 |
Copyright | |
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Common terms and phrases
amortization analysis arbitrage assume basis borrower call feature call option callable bond capital cash flows chapter convertible security convexity corporate bonds cost coupon payment coupon rate currency debt decline default risk dollar duration effect equilibrium exchange rate expected inflation face value factors financial assets financial instruments financial liabilities financial markets Fixed Income floating-rate forward contracts forward rate funds futures contract futures market greater hedge increase individual economic unit interest-rate investment investor issuer Journal of Finance Journal of Fixed lenders less LIBOR loan market price maturity municipal bonds nominal interest rates nominal rate noncallable occur percent period portfolio prepayment present value principal payments put option rate of interest real assets real rate relationship result risk premiums savings sector sell short-term structure of interest swap tax rate term structure tion Treasury bond Treasury securities valuation volatility yield curve yield-to-maturity zero-coupon bond