Bond Convexity

[@kakia17]

the only video on internet regarding duration that "explains" anything. good job.

[@AShiga]

Best explanation I've ever seen, thank you very, very much!

[@rednola9892]

Holy Crap. thanks for actually explaining it. My teacher went on for 3 hours and didn't really explain anything or the relations hahahah.

[@fauxhawkboy109]

This video is so helpful. I didn't even have to read the entire chapter from the textbook on this topic. Thank you for the video !

[@john5927572]

Great video! Was having trouble understanding the concept when reading Fabozzi's fixed income handbook, but this cleared things up. Thanks!

[@imdamij2452]

That was an incredibly simple and helpful explanation. Thank you!

[@gmartirosyan]

Now this is what I call proper explanation!!!!

[@synaesthesia8]

Great vids on Duration, Modified Duration and Convexity! Really clears up the topic.

[@babyharipriya1114]

Super sir Our sir took 2 hours but he doesn't connect any thing finally all class confused .... u r explanation helps us a lot .....

[@shahneoajsumon4059]

This is the best video for Bond duration and convexity!! Thanks very much for creating a nice videos for us.

[@pjernmark]

Bond pricing is like love. If you don't lean into it, it will escape you.

[@joshuaalexander3578]

Fantastic explanation. Going to watch your other videos on this topic. 10/10

[@HarishMohan-k5e]

Very clearly explained. Thank you very much!

[@minhajasalzai6709]

That is a great and very clear explanation. THANK YOU VERY MUCH

[@jmhuang11]

Very clear and straight-forward. Thank you kind sir.

[@makeittrades5750]

That's how teaching is done!

[@srivalli2322]

Finally I am able understand Convexity..

[@mrguitardb]

excellent, saved me another hour figuring it out myself.

[@nguyenminhan3501]

the explanation is so good!!!

[@anusuyaayyadurai8716]

wrong formula at 2:21. the denominator should just initial price and not twice of initial price - isnt it?

[@laca5169]

really helpful video and easy to understand! Thanks!

[@priscillalu2804]

Brilliant explanation! Thank you

[@fincampuslecturehall4833]

We have also posted separate videos on Macaulay Duration and Modified Duration. Those videos go through the exact calculation of D and Dmod. You can search for "finCampus Lecture Hall duration" to see those videos. Thanks

[@shadmakhan6200]

Sir I read convexity effect formula in schweser as 1/2*C*change in y2 where you have not divided c adjustment by 1/2 please explain the difference

[@fincampuslecturehall4833]

Why do I have 2 in the denominator of convexity formula?

[@minhajasalzai6709]

Great video and explanation. Thank you very much.

[@enmass90]

This is amazing. Thank you 🙏

[@Nick-yn2uz]

Quick question: If I see that an investment grade corporate bond has a duration of 6, I understand that a 1% move in rates results in -6% in the bond price, but WHAT RATES ARE WE TRACKING? The 10 Yr treasury? 5 year treasury? Thank you!!

[@tricepsish]

what equation did u use to calculate the bond price at the start. I keep getting 965.29 not 964.54

[@liubovpiano9573]

discount rate per period is 5% PV are 38.10, 36.28, 34.55, 855.61. Add them together and get 965.54

[@abhikaushikin]

very simple and up to the point explanation.

[@tildahkwembeya3621]

Waaaaaaaw have understand now thanx

[@freyabouwman]

How do you derive at a PV0 (initial value) of 964,54? Using my financial calculator (N=2, Y=10, PMT=80, FV=1000) CPT PV the PV) should be 965,29? Also in this case I ignore the semiannual coupon payment which you talk about in the video. Taking a semiannual coupon payment into account, I compute a initial price of 809,81 (N=4, Y=10, PMT=40, FV=1000). Could you provide me with some clarification? Maybe this is an error for using a financial calculator instead of excel?

[@liubovpiano9573]

you need C\Y=2

[@peaceworld0]

in my class it says to calculate the convexity effect we should do C x (Chng Y)^2 x 0.5 why isn't the 'times 0.5' mentioned in this video, or why is it being taught to me as a different formula? Help anyone?

[@fincampuslecturehall4833]

Do you see a "divided by 2" in the formula? That's equivalent to 0.5.

[@peaceworld0]

@@fincampuslecturehall4833 Hi it's okay I passed my exam, thanks for the reply though :)

[@mgomez34]

Whata great video, i have to admit i had to do a bit of prior 📚

[@genechaas7369]

Very well presented sir!

[@VinodKumar-yp8gd]

Hello could you please explain how do u arrive at 982.06 Is it 964.54+1.7955% = 981.858…?

[@antoniogomez8480]

Great video, Thanks. I was wondering whether it is feasible to have two securities with exactly the same duration and yield and different convexity. Cheers.

[@fincampuslecturehall4833]

Yes, it's possible. Think of a situation where the two bonds have different coupons.

[@murrowboy]

I am confused. How is it possible to have convexity when the coupon for bonds are fixed? Doens't the yield always have a linear relationship with the price? If you plot out price on a chart with a fixed coupon, the yield should be linear. How is it possible to curve???

[@fincampuslecturehall4833]

Your questions are good but reflect a bit of a gap between bond mechanics and how they relate to the concept of convexity. May I ask you to view the following 3 videos and then coming back to convexity: 1) Bond pricing 2) Macaulay duration 3) Modified duration Let me know if you have questions after that. Thanks

[@fincampuslecturehall4833]

Best way for you to figure this out is by trying it yourself. Take a coupon-bearing bond, write out the cash flows and plot it. You will see a non-linear relationship.

[@murrowboy]

finCampus Lecture Hall Yes thanks that makes sense. So the coupon amount is what you get paid or the yield amount? Since they are different. For example the 30-year should be paying $3 on par. This is not true with convexity.

[@fincampuslecturehall4833]

Coupon is what you get paid. The question you're asking me has nothing to do with convexity and vice versa. From the questions you're asking me, I feel you need to review basics of bond terminology: coupon, yield, term to maturity. I have a video on bond pricing. I would watch that and then watch videos on duration before looking at convexity.

[@promilathakur372]

Best explained

[@darluok23]

Thank you very much, very well explained...

[@11Astonmartin]

Very simple, on point viedeo

[@chiangeric5986]

best explanation

[@kirilspaseski3020]

great explanations! thanks!

[@sabancelik6339]

thanks very nice short-cut formula

[@hacaify]

splendid, thank you.

[@kaushikvankadkar8430]

This is the best...

[@13traders98]

can u explain how did u get 947.42

[@fincampuslecturehall4833]

Just calculate the bond price with yield of 11%. Here's a video on how to calculate bond price. kzbin.info/www/bejne/rIe3XqZ5fpeSqZY

[@FrixyFrizzy]

Could you explain how this concept is beneficial to investors?

[@fincampuslecturehall4833]

Alex Frixou While some benefits are already explained in the video, traders often like to estimate the impact of potential rate changes on bond positions in order to determine their potential profit and loss. Sometimes they hedge duration and only bet on convexity.

[@Showsable]

Outstanding!

[@ps2cho]

in my class its done completely different and I don't understand the difference. We have been taught that convexity = weight1(1+1^2/1+ytm^2)+w2(2+2^2/1+ytm^2)etc...

[@sabancelik6339]

this is a short-cut formula. I proved that it is correct in excel.

[@juanbarbenza7066]

excelent video

[@lifahtuty2978]

Why do i get C=2.074 not 2.09?🤔

[@LehNkuna]

At this point I don’t why am paying my tuition fees . Cause KZbin is best

[@PandyV22]

Good job, thank you

[@federicodrudi7752]

Great! Thank you

[@mahaveerjain5048]

thanks for video

[@tricepsish]

oh sorry, u said semi annually at the start. i missed that. Thanks!

[@РасуловШохрух-л7з]

there's a mistake with the formula of convexity adjustment. Change in yield shouldn't be with the power of 2, because the answer of adjustment will be 0.000209.

[@PhiaNova]

which equals 0.0209% (0.0209/100=0.000209)

[@hitendramehra5439]

very nice

[@niketankotadiya9542]

sir please provide video for option convexity

[@fincampuslecturehall4833]

Thank you for the suggestion. Let us work on it. Such suggestions are always helpful.

[@gazchao]

Nice video. Thanks. I think the formula seems wrong. There shouldn't be 2 in the denominator.

[@fincampuslecturehall4833]

Here is a way to check the formula. Take second derivative of price with respect to interest rate and see what you get. Thanks

[@Mmmmeow]

10 mins of work better than 10 hours of self-learning

[@gianmarcovicinanza1067]

THANK YOU

[@eliesalem2695]

Thanks a million

[@KristianElbaek]

This is hot shit! Thx!

[@zil7692]

Unfortunately, the audio quality is horrendous. Hard to listen to.

[@fincampuslecturehall4833]

My apologies. I started making these videos with my home mic but kept getting positive feedback which got me started. Now I have an animation studio with voiceovers done by professional artists in a soundproof setting so if you want that, I would be happy to help.

[@antardas4830]

I you forgot 0.5 in your Convexity adjustment formula.

[@roppeuyassi3423]

Thank you

[@AdkJmly]

Somehow i got 2.07 not 2.09

[@rxz710]

you sounds like my prof lol

[@fincampuslecturehall4833]

Many say that now :)

[@peete91]

nvm I got it!

[@attangi]

THE FORMULAR SEEMS WRONG

[@fincampuslecturehall4833]

Where in particular?

[@attangi]

I think the denominator is not multiplied by 2. pls correct me if I'm wrong

[@fincampuslecturehall4833]

In that case, I can assure you the formula given in the video is correct. However, for your clarification, it would be good if you can derive the formula. Hint: take the second derivative of bond price with interest rate.