Chapter 5. Bond and Stock Valuation
Bond or fixed income securities and stock are two widely used investment vehicles. Thus, they deserve a thorough discussion. Before touching upon bond or stock valuation, we have to discuss interest rate and its related concepts, such as Annual Percentage Rate (APR), Effective Annual Rate (EAR), compounding frequency, how to convert one effective rate to another one, the term structure of interest rate, how to estimate the selling price of a regular bond, how to use the so-called discount dividend model to estimate the price of a stock, and so on. In particular, this chapter will cover the following topics:
- Introduction to interest rates
- Conversion between various effective rates, APR
- The term structure of interest ...
Get Python for Finance - Second Edition now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
