UPDATE: You can also find the YTM by trial and error. If you plug in 0.06 for the YTM in the equation this gives you $91,575, which is lower than $92,227. YTM = 0.058 gives you $92,376, which is a little bit higher than $92,227. YTM = 0.0585 gives you $92,175, but YTM = 0.0584 gives you $92,215 which is very close to $92,227. Thus, 5.84% is the approximate YTM
This video explains how to calculate the yield-to-maturity of a coupon bond. A comprehensive example is provided that shows the formula for calculating the yield, but the video also provides a Microsoft Excel formula that provides an easier means of determining the yield.
Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com
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Views: 77248
Edspira

In this revision video we work through some numerical examples of the inverse relationship between the market price of fixed-interest government bonds and the yields on those bonds.
Government bonds are fixed interest securities. This means that a bond pays a fixed annual interest – this is known as the coupon
The coupon (paid in £s, $s, Euros etc.) is fixed but the yield on a bond will vary
The yield is effectively the interest rate on a bond. The yield will vary inversely with the market price of a bond
1.When bond prices are rising, the yield will fall
2.When bond prices are falling, the yield will rise
- - - - - - - - -
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tutor2u

Download Preston's 1 page checklist for finding great stock picks: http://buffettsbooks.com/checklist
Preston Pysh is the #1 selling Amazon author of two books on Warren Buffett. The books can be found at the following location:
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In this lesson, we began to understand the important terms that truly value a bond. Since most investors will never hold a bond throughout the entire term, understanding how to value the asset becomes very important. As we get into the second course of this website, a thorough understanding of these terms is needed. So, be sure to learn it now and not jump ahead.
We learned that there are two ways to look at the value of a bond, simple interest and compound interest. As an intelligent investor, you'll really want to focus on understanding compound interest. The term that was really important to understand in this lesson was yield to maturity. This term was really important because it accounted for almost every variable we could consider when determining the true value (or intrinsic value) of the bond. Yield to Maturity estimates the total amount of money you will earn over the entire life of the bond, but it actually accounts for all coupons, interest-on-interest, and gains or losses you'll sustain from the difference between the price you pay and the par value.

Views: 371995
Preston Pysh

This video will show you how to calculate the bond price and yield to maturity in a financial calculator.
If you need to find the Present value by hand please watch this video :)
http://youtu.be/5uAICRPUzsM
There are more videos for EXCEL as well
Like and subscribe :)
Please visit us at http://www.i-hate-math.com
Thanks for learning

Views: 297972
I Hate Math Group, Inc

Given four inputs (price, term/maturity, coupon rate, and face/par value), we can use the calculator's I/Y to find the bond's yield (yield to maturity). For more financial risk videos, visit our website! http://www.bionicturtle.com

Views: 131186
Bionic Turtle

This video demonstrates how to calculate the yield-to-maturity of a zero-coupon bond. It also provides a formula that can be used to calculate the YTM of any zero-coupon bond.
Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com
To like us on Facebook, visit https://www.facebook.com/Edspira
Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com
To follow Michael on Facebook, visit
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To follow Michael on Twitter, visit
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Views: 37296
Edspira

Why yields go down when prices go up. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/annual-interest-varying-with-debt-maturity?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/relationship-between-bond-prices-and-interest-rates?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Finance and capital markets on Khan Academy: Both corporations and governments can borrow money by selling bonds. This tutorial explains how this works and how bond prices relate to interest rates. In general, understanding this not only helps you with your own investing, but gives you a lens on the entire global economy.
About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.
For free. For everyone. Forever. #YouCanLearnAnything
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Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy

Views: 249084
Khan Academy

This video from N S TOOR School of Banking, explains the concept of Yield to Maturity. It also provides a case study to understand the concept of YTM

Views: 176888
Ns Toor

Introduction to the treasury yield curve. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/relationship-between-bond-prices-and-interest-rates?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/introduction-to-bonds?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Finance and capital markets on Khan Academy: Both corporations and governments can borrow money by selling bonds. This tutorial explains how this works and how bond prices relate to interest rates. In general, understanding this not only helps you with your own investing, but gives you a lens on the entire global economy.
About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.
For free. For everyone. Forever. #YouCanLearnAnything
Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1
Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy

Views: 366436
Khan Academy

http://www.subjectmoney.com
http://www.subjectmoney.com/definitiondisplay.php?word=Bond%20Pricing
In this video we show you how to calculate the value or price of a bond. We teach you the present value formula and then use examples to discount the coupon payments and principle payment to their present value. We also show you how to solve the price of a semi-annual bond. In this case you would multiply the periods by two and divide the YTM and coupon payments by 2. We also show you how to solve the accrued interest of a bond to find out what it would sell for at a date that is not on the exact coupon payment date.
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Subjectmoney

FinTree website link: http://www.fintreeindia.com
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We love what we do, and we make awesome video lectures for CFA and FRM exams. Our Video Lectures are comprehensive, easy to understand and most importantly, fun to study with!
This Video was recorded during a one of the CFA Classes in Pune by Mr. Utkarsh Jain.

Views: 19491
FinTree

In this video, you will go through an example to find out the yield to call of a bond.

Views: 5758
maxus knowledge

Bonds and Bond Yields. A video covering Bonds and Bond Yields
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Views: 28100
EconplusDal

Why bond prices move inversely to changes in interest rate. Created by Sal Khan.
Watch the next lesson:
https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/treasury-bond-prices-and-yields?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/introduction-to-the-yield-curve?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets
Finance and capital markets on Khan Academy: Both corporations and governments can borrow money by selling bonds. This tutorial explains how this works and how bond prices relate to interest rates. In general, understanding this not only helps you with your own investing, but gives you a lens on the entire global economy.
About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.
For free. For everyone. Forever. #YouCanLearnAnything
Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1
Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy

Views: 541058
Khan Academy

Yield to maturity (YTM) is the total return anticipated on a bond if the bond is held until the end of its lifetime. ... In other words, it is the internal rate of return of an investment in a bond if the investor holds the bond until maturity and if all payments are made as scheduled.
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Views: 18846
Yadnya Investment Academy

What's the difference between a spot rate and a bond's yield-to-maturity? In this video you'll learn how to find the price of the bond using spot rates, as well as how to find the yield-to-maturity of a bond once we know it's price.
Simply put, spot rates are used to discount cash flows happening at a particular point in time, back to time 0. A bond's yield-to-maturity is the overall return that the investor will make by purchasing the bond - think of it as a weighted average!

Views: 6645
Arnold Tutoring

Free Online Textbook @ https://businessfinanceessentials.pressbooks.com/
An example of calculating Yield-to-Maturity using the 5-key approach.

Views: 135686
Kevin Bracker

Premium Course: https://www.teachexcel.com/premium-courses/68/idiot-proof-forms-in-excel?src=youtube
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This tutorial will show you how to calculate bond pricing and valuation in excel. This teaches you how to do so through using the NPER() PMT() FV() RATE() and PV() functions and formulas in excel.
To follow along with this tutorial and download the spreadsheet used and or to get free excel macros, keyboard shortcuts, and forums, go to:
http://www.TeachMsOffice.com

Views: 181948
TeachExcel

Yield to maturity (YTM, yield) is the bond's internal rate of return (IRR). It is the rate that discounts future cash flows to the current market price. For more financial risk management videos, visit our website at http://www.bionicturtle.com

Views: 221519
Bionic Turtle

In this video, you will learn to find out current yield for a bond.

Views: 4461
maxus knowledge

This is a simple example for the calculation of current yield and yield to maturity of a bond.

Views: 22134
DrCaoMoney

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Learn complete concept of Indian Economy for CIVIL SERVICE EXAMINATION in the simplest way.
NEO IAS e-learning classes is an online program which aims to create CIVIL SERVANTS for the development of the nation by providing the video series of complete topics that are relevant for the CIVIL SERVICES (IAS/IPS) Exam.

Views: 30168
NEO IAS

An example of Yield-to-Call using the 5-key approach. Also discusses the call provision and when a bond is likely to be called.

Views: 34941
Kevin Bracker

In this video we are going to discuss about Current Yield, its formula, and with examples and many more.
𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐘𝐢𝐞𝐥𝐝 𝐅𝐨𝐫𝐦𝐮𝐥𝐚 𝐃𝐞𝐟𝐢𝐧𝐢𝐭𝐢𝐨𝐧
--------------------------------------------------------
This is a different type of formula, the reason is it doesn't calculates the return on the original price, thus it calculates the return on current price.
𝐅𝐨𝐫𝐦𝐮𝐥𝐚 𝐟𝐨𝐫 𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐘𝐢𝐞𝐥𝐝
---------------------------------------------
Current Yield = Annual Coupons/Current Bond Price
𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐘𝐢𝐞𝐥𝐝 𝐄𝐱𝐚𝐦𝐩𝐥𝐞
---------------------------------------
Sam has invested into 2 bonds.
Original price of these bonds is $2000 and #2500. But the risk for both bonds were same.
The annual coupons for each of these bonds were $250 and $280.
Current Price of these bonds were $2200 and 2800.
Now find out the bond yield and current yield for both these bonds.
We will find the bond yield first.
Bond yield for the 1st bond is $250/$2000 = 13%
Bond yield for the 2nd bond is $280/2500 = 11%
Now, we will calculate the current yield of a bond
Yield of the 1st bond is $250/2200 = 11%
Yield of the 2nd bond is $280/$2800 = 10%
As per the basis of yield, Sam should invest in the 1st bond. Since both bonds are same in terms the of risk, so we can easily say that 1st bond will be the best among these two bonds.
To know more about Current Yield, you can visit this 𝐥𝐢𝐧𝐤 𝐡𝐞𝐫𝐞: https://www.wallstreetmojo.com/Current-Yield/

Views: 486
WallStreetMojo

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KEY POINTS
1. Bond prices and bond yields move in opposite directions. When bond prices go up, that means yields are going down; when bond prices go down, this means yields are going up. Mathematically, this is because yield is equal to:
annual coupon payments/price paid for bond
A decrease in price is thus a decrease in the denominator of the equation, which in turn results in a larger number.
2. Conceptually, the reason for why a decrease in bond price results in an increase bond yields can be understood through an example.
a. Suppose a corporation issues a bond to a bondholder for $100, and with a promise of $5 in coupon payments per year. This bond thus has a yield of 5%. ($5/$100 = 5%)
b. Suppose the same corporation then issues additional bonds, also for $100 but this time promising $6 in coupon payments for year -- and thus yielding 6%.
No rational investor would choose the old bond; instead, they would all purchase the new bond, because it yielded more and was at the same price. As a result, if a holder of the old bonds needed to sell them, he/she would need to do so at a lower price. For instance, if holder of the old bonds was willing to sell it at $83.33, than any prospective buyer would get a bond that earned $5 in coupon payments on an $83.33 payment -- effectively an annual yield of 6% (5/83.33). The yield to maturity could be even higher, since the bond would give the bondholder $100 upon reaching maturity.
3. The longer the duration of the bonds, the more sensitivity there is to interest rate moves. For instance, if interest rates rise in year 3 of a 30 year bond (meaning there are 27 years left until maturity) the price of the bond would fall more than if interest rates rise in year 3 of a 5 year bond. This is because an interest in interest rates reduces the relative appeal of existing coupon payments, and the more coupon payments that are remaining, the more interest rate fluctuations will impact the price of the bond.
4. Lastly, a small note on jargon: when investors or commentators say, "bonds are up," (or down) they are referring to bond prices. "Bonds are up" thus means bond prices are up and yields are down; conversely, "bonds are down" means bond prices are down and yields are up.

Views: 63956
InformedTrades

Download Excel workbook http://people.highline.edu/mgirvin/ExcelIsFun.htm
Learn how to Calculate YTM and Effective Annual Yield From Bond Cash Flows using the RATE & EFFECT Functions.

Views: 22284
ExcelIsFun

An example of finding the YTM (yield to maturity) of a bond using the =RATE formula in Excel.

Views: 51771
Jeff Davis

Views: 119641
Rahul Malkan

Yield to maturity (YTM) is the total return anticipated on a bond if the bond is held until the end of its lifetime. Yield to maturity is considered a long-term bond yield, but is expressed as an annual rate. In other words, it is the internal rate of return of an investment in a bond if the investor holds the bond until maturity and if all payments are made as scheduled.
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Views: 64614
Learning sessions

In this video I describe what is meant by the "yield" on a bond and how to calculate two its common forms - current yield and yield to maturity (or book yield)
There is a useful simple calculator which lets you calculate YTM/price
http://www.investopedia.com/calculator/aoytm.aspx
Here is the link to my Excel example
https://www.dropbox.com/s/s461ljktnhqn3j6/matt_yield_calculations.xlsx?dl=0

Views: 720
Matt Thomas

In this lecture, we price the same standard bond given three different ratings agency ratings, which has given us three different required overall yields to get from the bond, given the changing levels of risk.
After explaining the theory of present valuing the different fixed cashflows, we then use an Excel spreadsheet to calculate the three different bond prices.
The lecture finishes with an Excel chart which displays the relationships between coupon rate, flat yield, and yield to maturity, as well as highlighting the most important concept in bond trading; when required interest rates go up, bond prices go down, and when required interest rates go down, bond prices go up.
For those who wish to know how to calculate a yield to maturity given a market bond price, see the next lecture.
Previous: http://www.youtube.com/watch?v=-tN32FU3D_k
Next: http://www.youtube.com/watch?v=hHR_GSEisRs
For financial education from London to Singapore and beyond, please contact MithrilMoney via the following website:
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This MithrilMoney lecture was delivered by Andy Duncan, CQF.
Please read our disclaimer:
http://mithrilmoney.com/disclaimer/

Views: 48024
MithrilMoney

There are several different types of yield you can use to compare potential returns on an investment. Chip Loughridge with Zions Direct explains Current Yield and Yield to Maturity, as well as when you would typically use these calculations.
What did you think? Leave a comment or subscribe to our channel to continue building your investment knowledge.
You can open an investment account and purchase stocks, bonds, CDs, mutual funds and more at www.zionsdirect.com or call us at 800-524-8875.
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Views: 15389
Zions TV

how to calculate Yield to Maturity of a Coupon paying bond
How to calculate Yield to Call of a Coupon paying bond that is callable

Views: 4082
Elinda Kiss

Hello friends! In this video you will learn the following concepts of Accounting and Finance as well as for Advanced Bank Management. This way we'll cover module b Business Mathematics of Advance Bank Management of CAIIB. This is concept of time value of money. You'll also get the idea of Net present value.
What is yield to maturity (YTM)?
What is bond?
How to calculate Yield to Maturity (YTM) ?
Introduction of yeild to maturity
Value a Bond and Calculate Yield to Maturity (YTM)
Related terms to bond.
Numerical on bond
Value of bond
JAIIB CAIIB BOND BASICS DIFFERENCE BETWEEN YIELD AND YTM
Coupon rate
face value
Finding Yield to Maturity using Excel
How to calculate yield to maturity?

Views: 36946
GrowYourself

In this tutorial, you’ll learn how to approximate the Yield to Maturity (YTM) of a bond, including how you might modify it to cover Yield to Call and Yield to Put as well as real-life scenarios with debt investing.
http://breakingintowallstreet.com/
"Financial Modeling Training And Career Resources For Aspiring Investment Bankers"
Table of Contents:
1:14 Part 1: The Yield to Maturity (YTM) and What It Means
5:27 Part 2: How to Quickly Approximate YTM
10:19 Part 3: How to Extend the Formula to Yield to Call and Yield to Put
13:32 Part 4: How to Use This Approximation in Real Life
16:27 Recap and Summary
Part 1: The Yield to Maturity (YTM) and What It Means
Yield to Maturity is the internal rate of return (IRR) from buying the bond at its current market price and holding it to maturity.
Assumption #1: You hold the bond until maturity.
Assumption #2: The issuer pays all the coupon and principal payments, in full, on the scheduled dates.
Assumption #3: You reinvest the coupons at the same rate.
Intuition: What’s the *average* annual interest rate % + capital gain or loss % you earn from the bond?
You can use the YIELD function to calculate this in Excel:
=YIELD(Settlement Date, Maturity Date, Coupon Rate, Bond Price % Par Value Out of the Number 100, 100, Coupon Frequency)
For example, if you buy a 5% bond for 96.23% of its par value on December 31, 2014, and hold it until its maturity on December 31, 2024, you could enter:
=YIELD(“12/31/2014”, “12/31/2024”, 5%, 96.23, 100.00, 1) = 5.500%
You could also project the cash flows from the bond and use the IRR function to calculate YTM, but this will work only for annual periods and annual coupons.
Part 2: How to Quickly Approximate YTM
Approximate YTM = (Annual Interest + (Par Value – Bond Price) / # Years to Maturity) / (Par Value + Bond Price) / 2
Intuition: Each year, you earn interest PLUS an annualized gain on the bond price if it’s purchased at a discount (or a loss if it’s purchased at a premium).
And you earn that amount on the “average” between the initial bond price and the amount you get back upon maturity.
For example, on a 10-year $1,000 bond with a price of $900 and coupon of 5%:
Annual Interest = 5% * $1,000 = $50
Par Value – Bond Price = $1,000 – $900 = $100
(Par Value + Bond Price) / 2 = ($1,000 + $900) / 2 = $950
Approximate YTM = ($50 + $100 / 10) / $950 = $60 / $950 = ~6.3%
There are a few limitations: the approximation doesn’t work as well with big discounts or premiums to par value, nor does it work as well with different settlement and maturity days. It also will not handle floating interest rates since it assumes a fixed coupon.
Part 3: How to Extend the Formula to Yield to Call and Yield to Put
Call options on bonds let companies redeem a bond early when interest rates have fallen, or its credit rating has improved, meaning it can refinance at a lower rate.
Usually, the company has to pay a premium to par value to call the bond early.
Put options are the opposite, and let investors force early redemption (usually when interest rates have risen, or the company’s credit rating has fallen).
Approximate Yield to Call or Yield to Put = (Annual Interest + (Redemption Price – Bond Price) / # Years to Maturity) / ((Redemption Price + Bond Price) / 2)
For example, to calculate the Yield to Call on a 10-year $1,000 bond with a price of $900, coupon of 5%, and a call date 3 years from now at a redemption price of 103:
Approximate YTC = ($50 + ($1,030 – $900) / 3) / (($1,030 + $900) / 2)
Approximate YTC = ($50 + $43) / $965 = $93 /$965 = ~9.7%, which you can estimate as “just under 10%”
Part 4: How to Use This Approximation in Real Life
Example: You’re at a credit fund that targets a 10% IRR on investments in high-yield debt.
JC Penney has a 4-year 7.950% bond that’s currently trading at 91.75 (as in, 91.75% of par value).
This seems like an easy “yes”: you get around 8% interest per year + an 8% discount / 4, and ~10% / average price of 96% results in a yield just above 10%.
BUT will a distressed company be able to repay the bond principal upon maturity? What if its financial situation worsens?
You estimate that in the best-case scenario, you’ll get 65% of the principal back upon maturity (65% “recovery percentage”). The recovery percentage will be 47% and 13% in more pessimistic cases.
Scenario 1 Approximate YTM: (8% – 27% / 4) / 78.5% = 1.6%
Scenario 2 Approximate YTM: (8% – 45% / 4) / 69.5% = -4.7%
So this is almost certainly a “No Invest” decision if these recovery percentages are accurate – even in the Upside Case, we’re far below 10%.
RESOURCES:
https://youtube-breakingintowallstreet-com.s3.amazonaws.com/Yield-to-Maturity-Formula-Slides.pdf
https://youtube-breakingintowallstreet-com.s3.amazonaws.com/Yield-to-Maturity-Formula.xlsx

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