CFA Level 1 | Fixed Income: Calculating Horizon Yield

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CFA Level 1
Topic: Fixed Income
Reading: Understanding Risk and Return
Title: Calculating Horizon Yield of a Fixed-Rate Bond
Steps:
1) Calculate the future value of the reinvested coupons up to the holding period.
2) Calculate the value of the bond on the holding period.
3) Calculate the YTM based on:
PV = -initial price
FV = value in Step (1) + (2)
PMT = 0
N = Holding period

[@Sibz]

I rarely comment on videos, I just had to tell you that you are a great teacher. You really helped me on the assignment I'm working on. Thank you!

[@FabianMoa]

You're welcome, Sibusiso! Glad it helped. You are currently taking a course on Corporate Finance/Investments?

[@Sibz]

@@FabianMoa I’m doing an MBA. It was for a course called Finance and Investment Decisions.

[@refilwetsalaile7647]

Thank you, this saved by CFA results indeed!

[@smithmendonsa922]

Thanks for the explanation Fabian. Insightful 👍

[@syeedmohammeduzzalhossain5452]

Thank you so much. ♥

[@rajivvash8120]

very thorough

[@FabianMoa]

Thanks!

[@widesreentv]

Many thanks
Made it very clear

[@carterfinance2376]

Love the video, top 5 RUclips channel for me

[@FabianMoa]

Thanks!

[@charisc8437]

it's great video and explain very clear. Thank you.

[@FabianMoa]

Thank you!!

[@mimfarhanajessica9320]

Thank you so much

[@FabianMoa]

You're welcome!

[@virx7944]

thank you sir, it was a very detail video.

[@FabianMoa]

You are welcome

[@doniyorakramov706]

How did you get this percentage of 12.70? If you divide (142.7 by 88.50) in the power of 1/10 and then subtract 1 it equals 4.89%

[@FabianMoa]

It's (142.7/88.50)^(1/4)-1

[@doniyorakramov706]

@@FabianMoa Thanks, Sir. Appreciate it

[@doniyorakramov706]

Show the manual calculation in comments, please