Vertiefung Finance at Universität Münster | Flashcards & Summaries

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# Lernmaterialien für Vertiefung Finance an der Universität Münster

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Reasons for higher issuance/ volume of new bonds than stocks

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-includes also government bonds

-stocks only one IPO, issuing bonds possible on regular basis

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Floating rate bonds

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Instead of a fixed coupon rate, the coupon rates of FRNs are periodically reset, e.g.
LIBOR plus 3% (LIBOR = London Interbank Offered Rate)

--> no interst rate risk , no risk of paying more than the market

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Inflation protected bonds

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Principal is adjusted regularly. It corresponds to the maximum
of original principal and consumer price index adjusted principal.

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Yield to maturity:

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required interest rate by the market

The yield to maturity for a bond is the interest rate reff such that the present value of
all cashflows calculated with this interest rate equals the bond price.

(average rate of return)

also called IRR  internal because it only depends on bonds itself and not on economical conditions

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Special case: if the bond trades at face value

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YTM= coupon rate

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flat term structure

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Same interest rate risk for different time to maturity

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(Macauly)-duration D

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The duration D is the (weighted) average length of capital commitment

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Why is Portfolio immunization is not stable over time

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because the duration does not decrease by one year when one year passes (only for zerobonds

after 1 year rebalancing is necessary e.g if the inverstor plans to consume in 4 years but duration is 4,3 year investor should invest in some short maturity bonds

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Duration effect of low-interest rates for banks

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firsthand positive because positive on equity due to higher value for assets but on the other hand margins declined and reinvestment risk increased

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yield curve is a representation of

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the relationship between market remuneration rates
and the remaining time to maturity of debt securities, also known as the term structure of interest rates

difffernt ways to describe it

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Why are discrete and continuously rate quite similar?

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Because natural logarithm function has a slope of 1 around the value of 1

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Based on which financial instrument is the oil price development (WTI) based

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These prices are based on for forward contracts

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• 321764 Karteikarten
• 4943 Studierende
• 104 Lernmaterialien

## Beispielhafte Karteikarten für deinen Vertiefung Finance Kurs an der Universität Münster - von Kommilitonen auf StudySmarter erstellt!

Q:

Reasons for higher issuance/ volume of new bonds than stocks

A:

-includes also government bonds

-stocks only one IPO, issuing bonds possible on regular basis

Q:

Floating rate bonds

A:

Instead of a fixed coupon rate, the coupon rates of FRNs are periodically reset, e.g.
LIBOR plus 3% (LIBOR = London Interbank Offered Rate)

--> no interst rate risk , no risk of paying more than the market

Q:

Inflation protected bonds

A:

Principal is adjusted regularly. It corresponds to the maximum
of original principal and consumer price index adjusted principal.

Q:

Yield to maturity:

A:

required interest rate by the market

The yield to maturity for a bond is the interest rate reff such that the present value of
all cashflows calculated with this interest rate equals the bond price.

(average rate of return)

also called IRR  internal because it only depends on bonds itself and not on economical conditions

Q:

Special case: if the bond trades at face value

A:

YTM= coupon rate

Q:

flat term structure

A:

Same interest rate risk for different time to maturity

Q:

(Macauly)-duration D

A:

The duration D is the (weighted) average length of capital commitment

Q:

Why is Portfolio immunization is not stable over time

A:

because the duration does not decrease by one year when one year passes (only for zerobonds

after 1 year rebalancing is necessary e.g if the inverstor plans to consume in 4 years but duration is 4,3 year investor should invest in some short maturity bonds

Q:

Duration effect of low-interest rates for banks

A:

firsthand positive because positive on equity due to higher value for assets but on the other hand margins declined and reinvestment risk increased

Q:

yield curve is a representation of

A:

the relationship between market remuneration rates
and the remaining time to maturity of debt securities, also known as the term structure of interest rates

difffernt ways to describe it

Q:

Why are discrete and continuously rate quite similar?

A:

Because natural logarithm function has a slope of 1 around the value of 1

Q:

Based on which financial instrument is the oil price development (WTI) based

A:

These prices are based on for forward contracts

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## Das sind die beliebtesten StudySmarter Kurse für deinen Studiengang Vertiefung Finance an der Universität Münster

Für deinen Studiengang Vertiefung Finance an der Universität Münster gibt es bereits viele Kurse, die von deinen Kommilitonen auf StudySmarter erstellt wurden. Karteikarten, Zusammenfassungen, Altklausuren, Übungsaufgaben und mehr warten auf dich!

## Das sind die beliebtesten Vertiefung Finance Kurse im gesamten StudySmarter Universum

##### Bio Vertiefung

Universität Greifswald

##### BWL (Vertiefung)

IU Internationale Hochschule

##### IT Vertiefung

Hochschule für Wirtschaft und Recht Berlin

LMU München