This article derives a new formula for the yield elasticity of bond price. The formula provides accurate results without resorting to complex mathematics, and gives new meaning to the concept of duration in fixed-income analysis

Most people have consumer loans during their lives, making it important that consumer credit legislation is effective. Legislation in many countries is based on the US Truth-in-Lending Act (TILA). Conventional financial analysis underlying the TILA argues the annual percentage rate (APR) is the...

There is an apparent rift between the way banks calculate and the way humans think.On the one hand, exponential discounting has played a centuries-long, lead role in financial analysis. On the other hand, experiments by behavioral economists demonstrate that hyperbolic discounting is better than...

It is well known that the various formulas for the duration of a bond give inaccurate results. Their accuracy can be improved by the addition of extra elements, such as convexity or duration vectors. But the results remain inaccurate. A recent paper proposed a new formula for the duration of a...

A new relationship is derived for net present value (NPV) per dollar invested that is composed entirely of interest rates. The rates are mark-ups to the cost of capital, each mark-up being an internal rate of return (IRR) embedded in the complex plane. The result has been shown before, but only...

The time value of money (TVM) equation is a core equation in finance. It is often differentiated to obtain the interest rate sensitivity of whatever is being valued. In fixed income analysis the result is incorporated into the concept known as duration. It is well known, however, that the...

In fixed income analysis it is known that the various measures of interest rate sensitivity (duration) yield approximate results. Even with the addition of concepts like convexity, the results remain approximations. This paper summarizes a new approach based on the fact that the time value of...

This article casts doubt on the conclusion reached by experimentalists in behavioral economics (and other subjects such as social psychology and political science) that hyperbolic discounting explains their data better than exponential discounting. A dual expression to the exponential...

Two criteria for choosing between capital investment projects are net present value (NPV) and internal rate of return (IRR). Sometimes they provide inconsistent rankings. This inconsistency sparked a debate about which criterion is better. The debate has lasted more than 100 years.This paper...

Multiple interest rate analysis (MIRA) is the study of all interest rate solutions to the time value of money (TVM) equation. These solutions include not only the orthodox solution produced by a financial calculator or spreadsheet but also the unorthodox solutions that a typical financial...