Bond Valuation Mastery

Tags: Investing

Become A PRO At Valuing One Of The Most Important Fixed Income Securities | Finance Fundamentals | Valuation Series

Last updated 2022-01-10 | 4.6

- Gain a solid foundation of the core fundamentals that drive the entire Bond Valuation process.
- Understand Bonds inside out
- including what they are
- their characteristics
- types
- payoff structure
- ratings
- and more.
- Apply what you learn immediately with example question walkthroughs
- and progressively challenging quizzes with the most detailed solutions
- ever.

What you'll learn

Gain a solid foundation of the core fundamentals that drive the entire Bond Valuation process.
Understand Bonds inside out
including what they are
their characteristics
types
payoff structure
ratings
and more.
Apply what you learn immediately with example question walkthroughs
and progressively challenging quizzes with the most detailed solutions
ever.
Become a PRO at Valuing Zero Coupon (Deep Discount) Bonds
Straight / Vanilla Bonds
and Consols manually and on Excel®.
Learn the powerful relationship between the Coupon Rate and the Yield to Maturity that most textbooks simply don't teach.
Estimate the Yield to Maturity of bonds manually as well as on Excel®

* Requirements

* No prior knowledge required. We start from the very basics. And build you to a Bond Valuation Guru.
* It's okay if math freaks you out. Seriously. Every single equation is explained one variable at a time. We rip it apart to its core
* and show you how simple it really is.
* You'll need a calculator; a pen and paper would be useful.

Description

Explore how to value one of the most versatile fixed income securities, inside out. Apply rock solid finance fundamentals to value Straight / Vanilla Bonds, Consols, and Zero-Coupon (“Deep Discount”) Bonds as well as their Yields, from scratch. Do this manually, and on Excel® and Google Sheets.

With no prior knowledge required, and a curriculum that's designed for distinction, this course will take you from zero to PRO in one of the most important aspects of modern day Finance. And build your finance fundamentals up from scratch, to hold you in good stead forever.

6 SECTIONS TO MASTERY.

Use our structured learning path, or dive right in to a specific concept you’re struggling with.

Introduction to Bonds

  • Get the basic finance fundamentals right, first time – so you learn once and retain it forever.

  • Explore what bonds are, including their types and characteristics.

  • Discover the “trading status” of bonds and see how ratings work.

The Fundamentals

  • Gain a solid command over the core finance fundamentals that drive the entire bond valuation process.

  • Understand the powerful logic and intuition behind discounting future cashflows.

  • Witness the power of compounding cashflows, including why we use (1+r) and not just r.

Valuing Bonds (Simple Cases)

  • Value a Zero-Coupon Bond from scratch.

  • Estimate the price of a Straight / Vanilla bond.

  • Value a Consol (aka ‘Perpetual Bond), and see why the formula works.

Valuing Bonds (Advanced)

  • Value bonds with semi-annual and quarterly coupons.

  • Explore the impact of compounding on bond prices.

  • See first hand how a change in the yield impacts the value of a bond.

Yield To Maturity Fundamentals

  • Explore the pre-requisites for estimating the yield.

  • Learn what the Net Present Value (NPV) is.

  • Understand the Internal Rate of Return (IRR) and see how it relates to the yield.

Estimating Yield To Maturity (YTM)

  • Calculate the YTM of a Zero-Coupon Bond from scratch.

  • Estimate the YTM of a Consol (aka ‘Perpetual Bond’).

  • Apply your knowledge of NPV and IRR to estimate the yield of a vanilla bond, manually and on Excel.


DESIGNED FOR DISTINCTION

Discover the intuition behind the bond valuation process and gain a solid foundation in Finance Fundamentals thanks to:

A Solid Foundation

You’ll gain a solid foundation of the core fundamentals that drive the entire bond valuation process.

Example Walkthroughs

Every major concept is taught with example question walkthroughs, so you can literally see how we value bonds from scratch.

Loads of Helpful Practice Activities

Apply what you learn immediately with 135 practice questions, all with impeccably detailed solutions.

One Page Cheat Sheets & Resources

Mathematical proofs, one page cheat sheets, workable Excel® & Google Sheets spreadsheets – all included.


Say goodbye to endless memorising.

Engage with carefully thought out, clutter-free, and engaging study materials that focus on the 20% finance fundamentals that drive 80% of the results.

Easily follow through complex concepts with great visuals that don’t overdo it.

Explore why bonds are valued the way they are, instead of memorising formulas without understanding them.

There really always is a reason for everything.


Feel your confidence rise.

Apply what you learn immediately in example question walkthroughs and progressively challenging quizzes with impeccably detailed solutions.

Engage with over 100 questions ranging from simple true and false ones to more complex problems that take you outside your comfort zone.

Questions are relevant for Ivy League / Russell Group University students as well as professionals studying for the ICAEW CFAB, ACA, ACCA, and CFA qualifications.

All questions designed in-house, by Professional Tutors with Russell Group Distinctions.


See how & why  the equations work.

Learn why we divide some variables by something, and multiply other variables by something else. Get past the painful approach of memorising countless equations.

Not only will we rip apart each equation one variable at a time, we’ll also give you mathematical proofs that show the equation’s logic one step at a time.

Save yourself time and effort by understanding why the equation works the way it does. Then go out and create your own equations thanks to your new rock solid finance fundamentals.

____________________________________________________________________________________________________

Here's what you get. And this is exactly why this is the only course you'll ever need to take to master Bond Valuation:

  • Over 3.5 hours of on-demand video content, with each concept broken down part by part, variable by variable, one equation at a time. Starting from the very basics, and building you to a point where you can handle more complex problems.

  • Student-centric, easy-to-read learning materials that will change the way you look at lecture notes. Seriously.

  • Quizzes and assignments that challenge you, progressively. With the most detailed solutions you've ever seen.

  • An easy to apply 'Discount Factor Table', with a built-in how to guide.

  • Mathematical proofs for the mathematically curious!

  • An instructor who's insanely passionate about Finance and Finance Fundamentals, and obsessed with helping you win.

____________________________________________________________________________________________________

As you can tell, we're new to Udemy. But we've been helping students and professionals master Finance and Accounting across Europe for a while now. Here's what our 1:1 Tuition Clients say about us.

We're proud of our students, and inspired by these stories - we decided to share them (unedited) with you...

"I have had a great experience with Fervent tutor as I was taught more of the content and less memorizing. I think their timings and their work is professional as the tutor seeks the most efficient and productive way to help the student. I studied accounting with the tutor and it contributed greatly to my knowledge for the exam."

- Abdulaziz, BA (Hons), International Management

"Fervent goes above and beyond the call of duty. First, they help you get the basics right and then assist you until you get a firm grip of your module. Fervent provides an extremely professional and patient environment. Doesn’t matter how many questions you have or silly you think they are, they encourage all of it. I never would have passed my module rather score a merit in it if it wouldn’t have been for Fervent."

- Shambhavi, MSc, Accounting and Finance

Fervent provides an exceptional service, the whole process from start to finish was very hands on and supportive – during my final year I needed tuition for a governance paper, essentially I was hoping they would do all the work for me but in the long run I got so much more than I bargained for ….they changed my entire thought process and maintained a complete professional reserve. Working with me every step of the way, I was encouraged to think critically in achieving my objective and inspired to dig deep. As a result I produced a 2000 word essay (which I had them proof read as well) worthy of a distinction. Thank you for all the help and most importantly thank you for believing in me.

- Sean, MSc, Accounting and Finance

Throughout the period of doing my Master’s dissertation, I felt agonised from not only researching my specific topic but also writing clearly with no any grammatical errors. Fortunately, I found Fervent which offers efficient and comprehensive services. At first, I just expected my dissertation to be improved in terms of grammar; however, Fervent provided me much more than that. All essential aspects such as formatting, structure, logic, consistency of analysis and critique, strength of arguments are also checked and corrected. One thing that I’ve been very grateful is related to my topic details. In addition to pointing out some big mistakes and recommending more accurate and professional alternative solutions, Fervent gave me many more interesting and valuable ideas which helped to develop my content to have stronger arguments and more critical analysis. My tutor’s suggestions helped me become more analytical in my thought process and in producing a better research paper; my critical thinking skills also saw a considerable improvement. Without Fervent’ support, I don’t believe I could have been awarded an excellent grade for this dissertation. Thank you so much for invaluable help over my hard time.

- Duang MSc, Financial Analysis and Fund Management

Undoubtedly the gains that I have acquired from the studying with Fervent are plentiful and significantly make me different from what I used to be in terms of my expanded knowledge base, improved English skills (e.g. English-writing), as well as being more confident communicating with English speakers and with the improved ability to think differently and critically for dealing with various types of course works in my study in the university more readily.

My tutor is specialized not only in the teaching of Accounting and Finance but also very familiar with the relevant knowledge in the subjects such as Marketing and Management. This is why I trust this person at an initial point along with his kind, friendly and very patient characteristics (e.g. I’m always encouraged by my tutor during the session with him, often to hear: if you really want it and then you can do it and will make it with no doubts).

“Skilled worker ushers in the gate, leads a pious life depending on individual.” This is a Chinese old saying which I can still remember vividly because it was what my tutor had told me in my  with him and made me believe an excellent learning outcome and a constructive learning process requires the hardworking from both of us. The record shows we did it. This is another reason I like Fervent as in the session with my tutor you see his hardworking as for the preparation for each session and in making the sessions distinctive from cliché-ridden teaching-and-listening classes by exploring the best way and the most suitable set of teaching methods to provide the student with the best value for money.

Jiajian BA (Hons), Business and Management


Who this course is for:

  • University / College students
  • ACA, ACCA, CFA, other Professional Students
  • Finance Managers, especially those from a Non-Finance Background
  • Investors
  • Analysts, aspiring Investment Bankers
  • Anyone who wants to learn how to value bonds!

Course content

11 sections • 48 lectures

Welcome to the Course. Here's What You're Going To Master. Preview 03:54

Welcome to Bond Valuation Mastery! Explore what you're going to learn and master in this course.

Disclaimer Preview 00:10

Course FAQs Preview 01:07

Where Should You Start? Preview 00:40

Coronavirus [Special Announcement] Preview 01:38

What Are Bonds? Why Buy Them & Why Issue Them? Preview 11:11

You'll learn what bonds are (hint: probably one of the most important fixed income securities ever), and gain an insight into a typical timeline for bond payoffs. You'll also learn why investing in bonds makes sense, and why entities choose to issue bonds.

What Are Bonds? Why Buy Them & Why Issue Them? [Quiz]

Bond Characteristics & Notations For The Course Preview 11:40

This video sets an important framework, walking you through the 4 characteristics that all bonds have, and the 5 characteristics that most bonds have. You'll also be introduced to the notations we'll use for the rest of this course, and benefit from our jargon buster which will help ensure you don't get overwhelmed / intimidated by the terminologies!

Bond Characteristics [Quiz]

Types of Bonds & Their Payoffs Preview 07:11

While there are hundreds, if not thousands of "types" of bonds, most if not all of them derive their roots from 3 Types of Bonds. In this video, you'll learn what those 3 types are, as well as their payoff timelines. This will set the initial foundation for later sections, wherein you'll learn to value each of these 3 types of bonds from scratch.

Types of Bonds & Their Payoffs [Quiz]

Bond's "Trading Status" Preview 06:10

This video shows you how a bond's trading status is a function of its par and price. You'll also learn about the usefulness of the status from a risk standpoint.

Bond's "Trading Status" [Quiz]

What Are Bond Ratings? How Do They Work? Preview 05:01

Explore what Bond Ratings are, including how they work and what they mean.

Bond Ratings [Quiz]

Bond Valuation Fundamentals Preview 11:03

In this video, we'll build your foundation by gaining a solid understanding of the core fundamentals that drive the entire bond valuation process.

Bond Valuation Fundamentals [Quiz]

Understanding Discounting Preview 16:54

Explore the powerful and intuitive concept of discounting cash flows, applied in the context of bond valuation.

Understanding Discounting [Quiz]

Understanding the Power of Compounding Preview 11:25

Explore the incredibly powerful concept of compounding cash flows, and understand why/how this fits in with discounting cash flows for bond valuation.

Understanding the Power of Compounding [Quiz]

How to value Zero Coupon Bonds? Preview 08:42

Now that you know the basics of bonds, and the core fundamentals that drive the entire bond valuation process, we can go deeper and learn how to value bonds. We'll start with the easiest case - Zero Coupon Bonds.

How to value Zero Coupon Bonds? [Quiz]

How to value Straight / Vanilla Bonds? Preview 19:00

You'll learn how to value the most "typical" bond - Straight / Vanilla bonds, i.e. those that pay a series of coupons every period, followed by a Par at maturity.

How to value Straight / Vanilla Bonds? [Quiz]

How to value Consols / Perpetual Bonds? Preview 07:16

Starting from the generalised equation for the Price of a bond, you'll learn how to derive the pricing equation for a Consol, and then apply it to value Consols.

How to value Consols / Perpetual Bonds? [Quiz]

Valuing bonds with semi-annual and quarterly coupons Preview 17:57

Now that you know how to value bonds in the simple cases, we can step it up a notch and deal with more complex problems. You'll learn how to value vanilla bonds with semi-annual and quarterly coupon frequencies (i.e. "non-annual" frequencies).

Valuing bonds with semi-annual and quarterly coupons [Quiz]

Valuing bonds when the yield changes Preview 19:43

Contrary to popular belief, yields do change - albeit not very frequently. In this video, you'll learn how to value bonds when the yield changes.

Valuing bonds when the yield changes [Quiz]

Who Should View This Section Preview 00:25

What is the Net Present Value? Preview 09:03

Complementary learning resources from our sister course on Investment Appraisal Mastery - explore what the NPV (Net Present Value) is. This is going to be vital in estimating the Yield to Maturity ("Yield", YTM) of a bond, which we'll explore in the next section.

What is the Net Present Value? [Quiz]

What is the Internal Rate of Return (IRR)? Preview 09:13

The second ingredient for estimating the Yield to Maturity (YTM) of a Bond. Another complimentary resource from our sister course on Investment Appraisal Mastery, explore what the Internal Rate of Return (IRR) is. Like the NPV, a solid understanding of the IRR is also crucial to estimate the YTM of a bond.

What is the Internal Rate of Return (IRR)? [Quiz]

Calculating the YTM (I, simple case with ZCBs & Consols) Preview 07:27

All this while, we assumed the bond yield / Yield to Maturity was known/given. In this video, you'll learn how to calculate it. Using simple algebraic manipulations, you'll learn how to calculate the yield for a Consol and Zero Coupon Bond, and also learn to calculate the 'Current Yield' for a Vanilla bond.

Calculating the YTM (I, simple case with ZCBs & Consols) [Quiz]

Calculating the YTM (II, advanced case with Straight / Vanilla Bonds) Preview 21:00

You'll learn how to estimate the yield for a straight / vanilla bond. This is a relatively advanced topic, and does have pre-requisites. Learning this requires an understanding of the NPV and IRR. While these topics are covered in great depth in our course on Investment Appraisal Mastery, we've included sufficient content relating to both concepts for free in the 'Pre-requisites to Estimating The Yield' section.

Calculating the YTM (II, advanced case with Straight / Vanilla Bonds) [Quiz]

Estimating The Yield (Advanced) [Assignment]

This assignment gives you the opportunity to apply your knowledge of estimating the yield for straight / vanilla bonds.

Revisiting Alpha, Bravo, & Charlie. Preview 00:25

Revisit Alpha, Bravo, and Charlie. Can you identify the overvalued bond now?

Revisiting Alpha, Bravo, & Charlie [Assignment]

You're now going to apply all your knowledge, and identify which one(s) is / are overvalued.

Final Step To Mastery - Valuing Bonds From Scratch.

This final test is designed to evaluate your knowledge of Bonds inside out. Covering questions relating to the basics of bonds through to advanced concepts including bond valuation and estimation of the yield.

Bond Valuation Cheat Sheet Preview 00:27

What would you like to learn next? Preview 00:27

Interesting Questions Asked (IQAs) Preview 14:13

BONUS: Continue Your Journey On Mastering Finance Preview 02:12