Comparison of spot curve, forward curve and bond yield

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Uploaded by on Jul 9, 2008

A simple comparison using a 2.5 year $100 par 6% semiannual coupon bond. Spot rate: the yield for each cash flow that treats the cash flow as a zero-coupon bond. A coupon-paying bond is a set of zero-coupon bonds. Forward rate: the implied forward rates that make an investor indifferent to rolling over versus investing at spot.
Yield to maturity (YTM, an IRR): the single rate that can be used to discount all of the bond's cash flows, in order to price the bond correctly. So the YTM is a flat horizontal line

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  • Why is a moron like you attempting to be smart by watching his videos that are way beyond your intelligence.  You're a rude idiot.

  • What's the calculation for the Discounted (forward) cells? From the video it looks as though you're using the same calc as for the Discounted (spot).

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  • R...i...g...h...t..."housechor­es" i think you should just stick to house chores...fixed income to you only means you'll never get a pay rise.  Good luck.

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