2.3 Yield Measures, Spot Rates, and Forward Rates

In this section

• Yield to Maturity (YTM): Understanding Bond Returns and Calculations
  Explore the concept of Yield to Maturity (YTM), a crucial measure of bond returns, and learn how to calculate it using practical examples and financial tools.
• Current Yield Explained: Understanding Bond Income and Market Price
  Explore the concept of current yield in bonds, its calculation, significance, and comparison with other yield measures like Yield to Maturity (YTM).
• Yield to Call and Yield to Put
  Explore yield to call and yield to put as key measures of return for bonds with embedded options, with comprehensive explanations, formulas, and examples.
• Spot Rate Curve: Understanding and Application in Bond Valuation
  Explore the concept of the spot rate curve, its role in the term structure of interest rates, and its application in bond pricing and valuation.
• Forward Rate Analysis in Bond Markets
  Explore forward rate analysis in bond markets, understand the relationship between spot rates and forward rates, and learn how to calculate forward rates from spot rates using the expectations theory.