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Course

Bond Valuation and Analysis in Python

BasicSkill Level

4.8+

Updated 06/2024

Learn how bonds work and how to price them and assess some of their risks using the numpy and numpy-financial packages.

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PythonApplied Finance4 hr14 videos49 Exercises4,100 XP4,040Statement of Accomplishment

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Course Description

The world’s bond market has a value of around 120 trillion dollars; it plays a key role in helping both governments and businesses raise capital and is an essential part of most investment portfolios. In this course, you’ll gain the essential skills needed to work in the financial, insurance, and accounting industries, including understanding and analyzing markets. Through hands-on activities, you’ll discover how bonds work, how to price them, and how to assess some of their risks using numpy and numpy-financial packages.

Prerequisites

Introduction to Functions in Python

1

Time Value of Money

In this chapter, you’ll cover simple and compound interest, compounding frequencies, future value as well as commonly used financial functions in the NumPy-financial package.

Simple interest & compound interest

Calculating simple interest

Calculating compound interest

Future value & compounding frequencies

Calculating future value

Calculating compounding frequencies

More financial functions

Calculating the number of periods

Calculating the payment amount

Calculating the required interest rate

Solving real-world problems

2

Bond Prices & Yields

Let’s get fiscal. You’ll discover how to find the price of both zero-coupon and coupon-paying bonds, as well as examining the relationship between bond prices and bond yields.

Present value & zero coupon bonds

Calculating present value

Pricing zero coupon bonds

Coupon paying bonds

Impact of bond yields on price

Impact of coupons on price

Bond prices vs. bond yields

Discount vs. par vs. premium

Plotting bond prices against yields

Calculating bond yields

Comparing zero coupon bond yields

Comparing coupon bond yields

3

Duration

Now it’s time for you to explore interest rate risk via the concept of duration, the factors affecting duration, and how to use duration to predict the price changes of a bond or hedge bond portfolios.

Interest rate sensitivity of two bonds

Zero coupon and coupon bond duration

Factors affecting duration

The bond with the highest duration

Comparing the duration of two bonds directly

Using the steepness of the price/yield line

Plotting duration vs. the factor

Dollar duration & bond price prediction

Percent duration and dollar duration

Creating a duration neutral portfolio

Predicting price impacts from duration

4

Convexity

In the final chapter, you’ll be introduced to convexity. You’ll see how it helps address the weaknesses inherent in duration, examine the factors affecting convexity, and use both duration and convexity together to better predict bond prices.

Predicted vs. actual prices I

Predicted vs. actual prices II

Finding the convexity of a bond

Factors affecting convexity

The bond with the highest convexity

Comparing the convexity of two bonds directly

Using the curvature of the price/yield line

Plotting convexity vs. the factor

Dollar convexity and bond price prediction

Dollar convexity

Convexity adjustment

Combining duration and convexity

Congratulations!

Bond Valuation and Analysis in Python

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*4.8

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Chun Yu

4 weeks ago

Charles

last month

there was an error in one of the first few practices in chap 3

Markus Michael

2 months ago

really only discussing most basic concepts.

Tung

2 months ago

.

Ildar

3 months ago

Himanshu

3 months ago

Chun Yu

"there was an error in one of the first few practices in chap 3"

Charles

Ildar

FAQs

Is this course suitable for beginners?

Yes! This course is suitable for those with little or no prior experience in bond valuation and analysis. It introduces the essential skills needed to understand and analyze the markets and is packed with hands-on activities to ensure you get the most out of the material.

Will I receive a certificate at the end of the course?

Yes, you will receive a certificate of completion upon finishing the course.

What topics will I learn in this course?

In this course, you’ll gain the essential skills needed to work in the financial, insurance, and accounting industries, such as Time Value of Money, Bond Prices an Yields, Duration, and Convexity, using numpy and NumPy-financial packages.

Who will benefit from this course?

This course provides essential skills for those looking to work in the financial, insurance, and accounting industries, along with those already in these industries wanting to upgrade their skills.

How long will it take to complete this course?

This course consists of five chapters and should take approximately 4 hours to complete.

What packages will I use in the course?

You’ll be using the numpy and NumPy-financial packages in this course.

What tools will I need to access the course?

You’ll need to have an internet connection and access to a computer to access this course.

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