Template-Type: ReDIF-Article 1.0
Author-Name: István Attila Veres
Author-Workplace-Name: Magyar Nemzeti Bank
Author-Email: veresi@mnb.hu


Title: Fixed Income Mathematics

Abstract: Better an egg today than a hen tomorrow, as the saying goes, and this could
also be the tenet of modern finance. This is because two cash flows received at
different times have different values. 100 forints today is not worth the same
as 100 forints one year from now. In fact, it is possible that 100 forints today
is worth more than 105 forints will be worth one year from now. This is the
time value of money, or more broadly speaking, its consumption value, and
it depends on the interest rate for the given period or, in layman’s terms, the
yield that can be achieved in a certain period.

Keywords: fixed income, bond analysis, investment mathematics, return calculation, duration, convexity, yield curve, bond trading

Journal: MNB Handbooks
Pages: 1-78
Volume: 1
Issue: 2
Year: 2016
File-URL: https://www.mnb.hu/letoltes/mnb-oktatasi-fuzetek-2-eng.pdf
File-Format: Application/pdf
Handle: RePEc:mnb:handbk:v:1:y:2016:i:2:p:1-78