01
Present value and discounting
Why is a dollar tomorrow worth less than a dollar today?
Core · Module 03
Time Value of Money & Fixed Income
The single most-used calculation in finance. Everything from a mortgage to a sovereign bond is this one idea with different decorations.
By the end of this module
You can price any stream of promised cash flows and explain why bond prices fall when rates rise.
0%0 / 5 complete
02
Annuities, perpetuities and amortisation
What am I actually paying in the first year of a mortgage?
03
Bond pricing, yield and duration
Why does a 30-year bond fall further than a 2-year when rates move?
04
The yield curve and what it predicts
What is the market saying when the curve inverts?
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ECON 251: Financial Theory ↗John Geanakoplos, Yale
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Check yourself
End-of-module quiz
Every answer comes with the reasoning, not just a verdict. Getting one wrong and reading why is the point.
01A 10-year zero-coupon bond and a 10-year coupon bond, same yield. Which has higher duration?
02Rates rise 1%. A bond with duration 7 falls approximately:
03The present value of a perpetuity paying C forever at rate r is:
Answer all 3 to finish the module.