Articles
Bond Duration and Convexity Simplified – Part 2 of 2
As we learnt in part 1, the duration, as measured by the slope of the curve, changes as yields change. The slope of the ...
Bond Duration and Convexity Simplified – Part 1 of 2
While analyzing bonds, it is important to apply the concepts of duration and convexity. Duration has been an excellent t...
Interest Rate Risk of Floating-rate Bonds
In case of fixed-rate bonds, the coupon is set as a reference rate plus a margin. Since the reference rates changes peri...
Price of a Callable Bond
The debt securities issued in the market can have many features; one such feature is an embedded option such as a call o...
Impact of Yield Level on Bond’s Price Sensitivity
In the previous article we learned about how maturity, coupon, and embedded options impact interest rate risk in bonds. ...
Bond Features Affecting Interest Rate Risk
We know that a bond’s price is inversely related to the yield. How sensitive a bond price is to yield depends on the var...
Understanding Inverse Price/Yield Relationship in Bonds
The investors in bonds face interest rate risk because the price of the bond is inversely proportional to the changes in...
Key Risks Associated with Investing in Bonds
Bonds are a lucrative investment class for investors and portfolio managers. However, just like any other investment, in...
Understanding Three Different Types of Binary Options Trades
Are you looking to get into the fast paced world of binary options investing? In the last few years, the popularity of ...
Waiting for the Perfect Pitch (Taking out a Business Loan)
Taking out a business loan can be compared to a batter trying to hit a pitch. Often the strict regulations and guidelin...
Best Linear Unbiased Estimator (B.L.U.E.)
The Need There are several issues when trying to find the Minimum Variance Unbiased (MVU) of a variable. The Prob...
Linear Combinations of Random Variables
The joint distribution of a particular pair of linear combinations of random variables which are independent of each oth...
Independent and Identically Distributed Variables
Definition I.I.D’s or independent and identically distributed variables are commonly used in probability theory and sta...
Interpretation of Skewness, Kurtosis, CoSkewness, CoKurtosis
Kurtosis It indicates the extent to which the values of the variable fall above or below the mean and manifests itsel...
Bayes Theorem – Calculating Conditional Probabilities
The Situation The field of science attempts to answer the following question which arises very often. Given a set of ...
Types of Commodity Investment Strategies
A portfolio manager can use several approaches to make commodity investments. There are three broad approaches: index fu...
Properties of Log-Normal Distribution
Definition If the logarithm to the power of the variable x is normally distributed then the variable itself is said t...
Paramteric vs Non-Parametric Distributions
Definitions Parametric Distribution: A parametric distribution is used in statistics when an assumption is made of th...
JPMorgan Chase: Out of Control
This new report from GrahamFisher focuses on the risk management and internal control environment at JPMorgan Chase. The...
Properties of Normal Distribution
Definition It is one of the most important continuous probability distributions which finds wide applications in real l...
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