[FREE EPDF] Yield to Maturity | Part 2 | Jaiib AFM Exam

In this detailed Part 2 session, Ashish Jain breaks down the concept of YTM, Bond Valuation, Current Yield, Rate of Return and important bond pricing theorems, all in a clear bilingual (Hindi-English) style.

This video is especially useful for:

• Bankers attempting JAIIB for the first time
• Students struggling with the AFM module
• Anyone looking to master bond calculations in a simplified way

👉 So grab your calculator, hit play on the video below, and don’t forget to drop your questions in the comments. Let’s crack it together! 💪

🎥 Watch the Full Video

👉 Before we dive in, watch this video for a complete breakdown:

🕒 00:00 – Welcome & Recap

Quick recap of Part 1 with a reminder to save 836094207 and WhatsApp “SAVE FOR JAIIB” to get FREE PDFs.

💰 00:29 – Understanding Semiannual Bond Calculations

• Divide coupon rate by 2
• Multiply tenure by 2
• Divide required rate by 2

Use PV = Coupon × PVIFA + FV × PVIF

📉 03:22 – Full Numerical: Present Value of Bond

Example: ₹10,000 FV, 10% CR, 3 years, 8% return

Answer: ₹10,524

Tip: If Coupon > Required Rate → Bond sells at Premium

🔍 06:08 – What is Current Yield?

Formula: Current Yield = (Annual Coupon / Market Price) × 100

Example: ₹100 / ₹850 = 11.76%

💹 08:57 – Total Rate of Return = Coupon + Capital Gain

Return = (Coupon + Capital Gain) / Purchase Price × 100

Example: (₹60 + ₹20)/₹1020 = 7.84%

📏 11:20 – What is YTM?

YTM is the discount rate at which the PV of all future cash flows equals the bond’s market price.

Solved using hit & trial + interpolation

🔢 15:29 – YTM Numerical (Hit & Trial Method)

Example: ₹1,000 FV, ₹850 CMP, ₹80 Coupon, 9 years

Try 10% → ₹884.72; 12% → ₹787.26

YTM = 10% + [(884.72 – 850)/(884.72 – 787.26)] × 2 = 10.71%

📚 20:43 – Bond Pricing Theorems

• ROR = Coupon → PV = FV
• ROR > Coupon → PV < FV (Discount)
• ROR < Coupon → PV > FV (Premium)
• Discount/Premium reduces as maturity nears
• Bond price ∝ Inversely to interest rate
• Longer tenure = Greater sensitivity to rate changes

✅ Conclusion

You’ve just mastered some of the most important topics in the AFM syllabus – from YTM to bond valuation tricks.

🔁 Re-watch, practice, and apply this knowledge to mock tests.

💬 Drop your questions in the comments & don’t forget to subscribe and share with your peers.

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