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Preface | |
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An introduction to the Texas Instruments BA II Plus | |
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Choosing a calculator | |
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Font convention | |
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BA II Plus basics | |
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Problems, Chapter 0 | |
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The growth of money | |
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Introduction | |
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What is interest? | |
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Accumulation and amount functions | |
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Simple interest / Linear accumulation functions | |
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Compound interest (The usual case!) | |
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Interest in advance / The effective discount rate | |
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Discount functions / The time value of money | |
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Simple discount | |
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Compound discount | |
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Nominal rates of interest and discount | |
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A friendly competition (Constant force of interest) | |
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Force of interest | |
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Note for those who skipped Sections (1.11) and (1.12) | |
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Inflation | |
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Problems, Chapter 1 | |
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Equations of value and yield rates | |
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Introduction | |
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Equations of value for investments involving a single deposit made under compound interest | |
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Equations of value for investments with multiple contributions | |
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Investment return | |
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Reinvestment considerations | |
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Approximate dollar-weighted yield rates | |
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Fund performance | |
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Problems, Chapter 2 | |
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Annuities (annuities certain) | |
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Introduction | |
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Annuities - immediate | |
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Annuities - due | |
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Perpetuities | |
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Deferred annuities and values on any date | |
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Outstanding loan balances | |
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Nonlevel annuities | |
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Annuities with payments in geometric progression | |
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Annuities with payments in arithmetic progression | |
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Yield rate examples involving annuities | |
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Annuity symbols for nonintegral terms | |
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Annuities governed by general accumulation functions | |
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The investment year method | |
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Problems, Chapter 3 | |
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Annuities with different payment and conversion periods | |
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Introduction | |
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Level annuities with payments less frequent than each interest period | |
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Level annuities with payments more frequent than each interest period | |
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Annuities with payments less frequent than each interest period and payments in arithmetic progression | |
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Annuities with payments more frequent than each interest period and payments in arithmetic progression | |
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Continuously paying annuities | |
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A yield rate example | |
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Problems, Chapter 4 | |
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Loan repayment | |
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Introduction | |
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Amortized loans and amortization schedules | |
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The Sinking Fund method | |
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Loans with other repayment patterns | |
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Yield rate examples and replacement of capital | |
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Problems, Chapter 5 | |
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Bonds | |
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Introduction | |
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Bond alphabet soup and the basic price formula | |
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The premium-discount formula | |
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Other pricing formulas for bonds | |
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Bond amortization schedules | |
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Valuing a bond after its date of issue | |
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Selling a bond after its date of issue | |
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Yield rate examples | |
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Callable bonds | |
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Floating-rate bonds | |
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The BA II Plus calculator Bond worksheet | |
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Problems, Chapter 6 | |
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Stocks and financial markets | |
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Common and preferred stock | |
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Brokerage accounts | |
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Going long: buying stock with borrowed money | |
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Selling short: selling borrowed stocks | |
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Problems, Chapter 7 | |
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Arbitrage, the term structure of interest rates, and derivatives | |
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Introduction | |
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Arbitrage | |
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The term structure of interest rates | |
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Forward contracts | |
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Commodity futures held until delivery | |
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Offsetting positions and liquidity of futures contracts | |
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Price discovery and more kinds of futures | |
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Options | |
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Using replicating portfolios to price options | |
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Using weighted averages to price options | |
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Swaps | |
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Problems, Chapter 8 | |
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Interest rate sensitivity | |
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Overview | |
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Duration | |
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Convexity | |
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Immunization | |
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Other types of duration | |
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Problems, Chapter 9 | |
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Appendices | |
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Some useful formulas | |
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Answers to end of chapter problems | |
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Bibliography | |
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Index | |