How to Calculate Spot Rates and Forward Rates in Bonds

thanks man

Can we get a forward from year 1 to 3?

Finally it clicked.

Amazing, the name is scary but your method is fabulous

At 3:34 why did you say subtract 1 from both sides, if I just divide it the answer is 1.38 and then if I subtract 1 it should be 0.38. man I feel so dumb

Thank you so much! I was able to understand my homework after struggling for some weeks!

This is the best video I have seen on the matter. It'll help imensely in the level 1 CFA Exam. Thank you brother

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the forward sign at T2 should be F2,1 ?

Great video. I took the CFA exams a long time ago and was looking for a review on calculating forwards. I don't do it quite the same way (i just calculate the cumulative bond cash flows, discount everything back and then find the rate that fits) but this video jogged the memory.

GREEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEATTT thanks ,, it is very helpful

2 hours lecture learnt in less than 10 mins 😭

Compared to my Proffesor who is on the board for the CFA , the way you explain this man just makes more sense 😂

thank you home skillet

Hi Ryan thx for that, I just wonder if it would be correct to do a kind of interpolation to get a result for example : (t2*S2) - (t1*S1)/t2-t1 ? The result would be 9% and not 9.038% ... what do you think ?

Really helpful, thanks!

Hugely appreciate this got my level 2 exam in May and this was solid better than my instructor and I’m being serious legend

But what is swap curve then? It seems like I for years thought Spot rate curve was Swap curve.

Goat

You are a star

Brilliant

thanks buddy

I'm in the CFA Level 1 curriculum now for the November exam - this explained it so much easier than the CFA lesson. You just got to the point instead of all the bullcrap that doesn't matter.

Thankyou mate
Appreciate your work

Thank you, Ryan, very useful!👍

OH MY GOD!! Its that easy?!!!! Thank you so much!

Hi Ryanb... thank you so much for the video ..just wanted to understand the practicality in the real life scenario of forward rates

Thanks Ryan. This was a great explanation!

your forward notation is wrong...

Thanks a ton!

thank you!

So can there be a spot rate at 0? Which is S0?

HI Ryan, wouldn't the forward rate that starts from 1 year for 1 year be denoted as F(1,1)?

so simple and clear. thank you.

Thank you for your valuable lecture so much, Ryan !!!😍

Hi! how did you get 9.04% at 3.48 seconds. i am so confused lol pls help me!

Thanks, Ryan for the explanation, for me, it just does not make any sense to calculate the forward rates from spot rates, because such calculation will always produce a higher rate, which could postpone the investment decision. with the compounding effect, you will always end up with a higher rate and therefore, instead of lending today, you will prefer to lend next year. using forward rates in capital budgeting will certainly increase the hardel rate dramatically and might lead to a decision, not to accept a project!. mathematically, there is no problem for me, but the application of that concept is my concern.

🫡

so if i want to lend someone money one year from now for 2 years that would be F1,3
and the calculation for that would be (1+S3)^3 = (1+S1)(1+S2)^2(1+F1,3) right?
please correct me if I'm wrong

Great explanation thank you!!!

God bless you, mate.

Thank you

Wouldn't the fwd rate be f2,1 @ 1:31 (not f2,3)? thanks

simple,easy and nice explaination

helpful visual but you are quoting your forward rates incorrectly. the correct way to quote a 1yr forward 2yrs from today (which you quote as F2,3) is actually F2,1