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Understanding the Yield Curve

What is Yield? Yield (also called Yield To Maturity, or YTM) is the return investors receive for holding a bond. Yield takes account of both the interest/coupons investors get and the bond price relative to its par value. What are Treasuries? US Treasuries are debt instruments the US Department of the Treasury issues

Central Banks and Monetary Policy: The Federal Reserve

In our previous post, we discussed the importance of interest rates in finance. We also introduced central banks by discussing the role it plays in influencing interest rates. We will go deeper into the function of central banks in this article, discussing their mandates and how they carry out their

Do You Have To Be Good At Math for Investment Banking?

Failing Calculus at UBC Setting: Two guys riled up from Frosh Week and having been introduced to the glitz and glamor of an investment banking job. $150,000 for a starving student that grabs free Campbell Chunky soup samples from the promotional guys walking around the Student Union Building and a bank balance

Breaking into Investment Banking: Applying for MBAs in Canada

With a great GRE/GMAT score, you are now ready for applications, right? Not quite. Depending on the desired school, there are a series of documents that you need to put together before the application deadline. We will go over those documents in this post. Canadian MBA Deadlines The first thing you should check

Breaking into Investment Banking: How to Ace Your GRE

Written by an engineer with a 333 on the GRE (163 Verbal, 170 Quantitative) If you are looking to break into investment banking or trading, an undergraduate degree in business, commerce or economics is typically the best way to do it. If you already have a university degree in another field

CAPM – Capital Asset Pricing Model

We talked extensively about valuing a stream of cash flows in the previous articles. By building on the idea of present value, we can use it to value more complex investments like stocks. We start our section on valuation with CAPM. The article covers several basic concepts in statistics. If you

Inflation and Interest

In the Net Present Value and Annuities/Perpetuities articles, we spent a lot of time talking about valuing a stream of cash flows. We presented you with formulas and shortcuts that discounted future cash by the appropriate discount rate r. We treated r as a constant in our examples – something

Annuities and Perpetuities

Annuities and perpetuities are financial products where the purchaser of the product receives a stream of future cash flows. Calculating the present value of annuities and perpetuities can be done with the PV formula described in the NPV article, but that can become cumbersome as complexity increases. The formulas introduced

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