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Python for Finance

You're reading from   Python for Finance Apply powerful finance models and quantitative analysis with Python

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Product type Paperback
Published in Jun 2017
Publisher
ISBN-13 9781787125698
Length 586 pages
Edition 2nd Edition
Languages
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Author (1):
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Yuxing Yan Yuxing Yan
Author Profile Icon Yuxing Yan
Yuxing Yan
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Toc

Table of Contents (17) Chapters Close

Preface 1. Python Basics FREE CHAPTER 2. Introduction to Python Modules 3. Time Value of Money 4. Sources of Data 5. Bond and Stock Valuation 6. Capital Asset Pricing Model 7. Multifactor Models and Performance Measures 8. Time-Series Analysis 9. Portfolio Theory 10. Options and Futures 11. Value at Risk 12. Monte Carlo Simulation 13. Credit Risk Analysis 14. Exotic Options 15. Volatility, Implied Volatility, ARCH, and GARCH Index

Introduction to interest rates

There is no doubt that interest rates play an important role in our economy. When the economy is expanding, interest rates tend to go high since the high demand of capital would push up borrowing rates. In addition, inflation might go up as well. When this is happening, central banks will do their best to control the inflation at an appropriate level. One tool to fight the potential inflation hike is to increase banks' lending rates. On the other hand, the bond price is negatively correlated with interest rates.

There is a good chance that many readers of this book are confused with the difference between simple interest and compound interest. Simple interest does not consider interest on interest while compound interest rate does. Assume that we borrow $1,000 today for 10 years. What are the future values at the end of each year if the annual rate is 8%? Assume that this annual rate is both the simple and compounded interest rates. Their corresponding...

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