Introduction to Interest Rates
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1. Introduction to Interest Rates
2. Compounding Interest Formula
3. Zero Coupon Bond (ZCB)
4. Understanding Forwards
5. Valuing Forward Contracts
6. Example: Asset without Income
7. Interest Rate Swaps
8. Valuation of Swaps
9. Futures Contracts Overview
10. No-Arbitrage Principle
Interest Rates
1. Introduction to Interest Rates
Interest rates are assumed non-negative, incentivizing bank deposits. Compounding frequency affects returns.
2. Compounding Interest Formula
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3. Zero Coupon Bond (ZCB)
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Forwards and Derivatives
4. Understanding Forwards
A forward is a derivative contract for buying/selling an asset at a specified future date for a specified price.
5. Valuing Forward Contracts
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6. Example: Asset without Income
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Interest Rate Swaps
7. Interest Rate Swaps
Swaps exchange cashflows at agreed dates. Involves a series of cashflows - fixed and floating.
8. Valuation of Swaps
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Futures and Arbitrage
9. Futures Contracts Overview
Futures are like forwards but involve daily cash flows and are traded on exchanges.
10. No-Arbitrage Principle
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Introduction to Interest Rates