SIE Exam Bond Teeter Totter. Inverse Relationship of Interest Rates & Prices. Series 7 and 65 too!

Time stamps:
00:00 Teeter totter versus Triangle. Teeter Totter takes into the interest rate relationship. Triangle does not
01:21 Flat line represents a bond at par. NY=CY=YTM(Basis)=YTC.
01:47 Ford Motor Company 8% Debenture, 10 years to maturity, callable in 5 years at par.
02:55 Nominal yield is also known as Coupon also known as fixed or stated rate of return
03:40 8% X 1,000 is $80 in annual interest paid in two semi-annual payments of $40
04:20 Current yield
05:30 Interest rates go up and the bonds goes down. INVERSE RELATIONSHIP!!!
06:00 Bond trading at 90% of par of $900
06:19 Nominal yield is lower than current yield which is lower than YTM(Basis) which is lower than YTC
06:55 Current yield is $80/$900=8.9%
07:30 YTM(Basis) is lower than YTC
08:19 Not likely bond will be called if interest rates are up from issuance
08:55 Bonds at par quoted on a yield to maturity basis. Quote lower of the YTM or YTC
10:10 Bond trading at premium. If interest rates go down bond price goes up.
10:40 Bond trading at 110% of par or $1,100
11:35 Current yield is $80/$1,100=7.3%
12:53 YTC is lowest yield. YTC is lower than YTM(Basis) which is lower than CY which is lower than NY
14:14 Use teeter to rank yields from low to high

[kathleengartelmann]

10-15 minute lectures. It’s simplifies it for me. Thank you so much

[sbabyeva]

I never understood these kinds of bond yield diagrams…until NOW. This channel is a treasure trove! Taking my SIE this coming Saturday and am just trying to shore up my weak areas and round out my knowledge. You are truly a guru.

[wyattgruntler]

Dean, I just took my 65 today and passed! I usually never comment on videos but your content helped me so much I’m forever grateful thanks 🙏

[adjeleya]

I have struggled with understanding this line/chart for a while until today. It makes so much sense now to me. Great, how you explained it using the line. Thank you so much for your dedication and all you do.

[samanthagarland]

I love the 15 minutes videos my drive to work isn’t long so I enjoy getting the full video in. The practice question are also helping me a lot.

[georgeluke]

8:32-40 great anthropology point there!

I prefer the 15 - 20 minutes, but love them all

[SunflowerLiving]

Thank you! Love the small quick ones that explain in detail. This helped me understand this concept.

[atboptimistic-]

I like the option of having both. One as a learning tool and the other as a refresher when I'm feeling unsure.

[rl]

Loved this quick hit. After watching several of the longer vids. Thanks!

[ericmaher]

my last thing to do before my exam then some practice questions on bonds, my weakest link. Thanks a bunch

[mehmetozturk]

Shorter videos are right to the point as well. Great video as usual.

[sandraingram]

Great lectures. I like the shorter lectures.

[cory]

This was so helpful, thank you for your clear concise explanations.

[HorrificNightmares]

Quick Question Dean. When T-bonds selling at a premium are quoted, is the yield listed always YTM? Thanks!

[erikaterry]

I like the shorter, 15 minute, versions.

[davidcynkin]

Amazing stuff! Would it be possible for you to do a video for everything that someone should put on their dump sheet to help them study?

[Indywealthplanning]

Dean, you commented that on the exam they may sometimes refer to the coupon or nominal yield, cy, ytm or true yield, ytc as "something we're not familiar with". Are there examples of what the exam might call these 4 that I'm not familiar with? Im other words how else might they express these 4 items on the exam to confuse me during the test?

[Indywealthplanning]

Why are premium bonds more likely to be called than discount bonds?