Interest rates and valuation

Interest rates and valuation

Bachelor of Business Studies (BBS) — Fourth Year

Subject: Fundamentals of Investment (FIN 253)

Unit 8: Bond Valuation

Academic Year: 2083/84

Topic Objectives

After studying this topic, students should be able to:

• Explain the scope and key elements of interest rates and valuation.
• Apply the relevant financial concepts or calculations and explain their assumptions, risks and analytical limits.

Curriculum Scope

• The behavior of market interest rate
• The term structure of interest rate and yield curve
• The basic bond valuation model
• Measures of yield and return

Detailed Microsyllabus

1. Rates and yield curves

   1. Market-rate behavior.
   2. Term structure and yield curve.
   3. Consistent maturity and rate definitions.

2. Bond valuation

   1. Discount coupons and principal.
   2. Calculate prescribed yield or return measures.
   3. State payment, holding and reinvestment assumptions.

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Curriculum reference: Tribhuvan University, Faculty of Management, revised four-year BBS curriculum, PDF pages 89–91.

Source note: The curriculum scope above is retained from the existing TU syllabus breakdown. The numbered study subtopics are editorial elaborations for teaching and study, rather than a separately issued TU syllabus. Unit or component allocations apply at their stated level; no separate topic hours or marks are assigned here. Examples involving current laws, rates, institutional products or Nepalese status must identify the relevant period and official materials; no changing numerical or legal requirements are invented here.