In the following ACCA Technical Article it shows us how to calculate the spot yields of bonds via bootstrapping, but I have not seen this mentioned in the syllabus, in OpenTuition lectures or in past exam questions. It is quite complicated and obviously not included in the formula sheet. Do we really have to learn it?
https://www.accaglobal.com/gb/en/student/exam-support-resources/professional-exams-study-resources/p4/technical-articles/bond-valuation-yields.html
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Bootstrapping bonds
1mo ago#1It has been asked in the exam once (although from memory only once, and soon after this article was published).
It is not really something to learn, although it is worth working through it just to check that you understand where the figures are coming from.
Thank you John. I have taken your advice and worked through it to understand the mechanics of the method, but I won't drill it like I do with the core syllabus.
1mo ago#3Great :-)
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