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A Simple and Student-Friendly Approach to the Mathematics of Bond Prices

Edward R. Lawrence & Siddharth Shankar

Quarterly Journal of Finance and Accounting2007article
ABDC B
Weight
0.44

What the paper says

In his seminal paper Malkiel (1962) rigorously developed and proved five theorems showing the relationship between changes in yield to maturity and bond price movements. These theorems are important in the eyes of the academicians and practitioners and find a place in virtually all finance textbooks dealing with the pricing of bonds. The proofs of the theorems are based entirely on calculus and seem to be challenging for finance professionals and students. Hence, finance textbooks usually describe these five theorems using figures and numerical examples to illustrate the results instead of providing any logical proof. In this paper we prove the Malkiel (1962) theorems using simple algebra and provide an alternate way of understanding the results.

5 citations

Cite this paper

@article{edward2007,
  title        = {{A Simple and Student-Friendly Approach to the Mathematics of Bond Prices}},
  author       = {Edward R. Lawrence & Siddharth Shankar},
  journal      = {Quarterly Journal of Finance and Accounting},
  year         = {2007},
}

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A Simple and Student-Friendly Approach to the Mathematics of Bond Prices

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Evidence weight

0.44

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.25 × 0.4 = 0.10
M · momentum0.80 × 0.15 = 0.12
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.