calculating discount margin

DM the discount margin, the variable to solve for.
Can anyone explain what the Required Margin and"d Margin are for a floating rate note?In concept, it is very similar to the par floater spread except that it is based on a calculation assuming a flat.Breaking down 'Discount Margin - DM'.The return of floating rate securities changes over time, so the discount margin is an estimate based on the security's expected pattern between issue and maturity.E F, g H, i J, k L, m N, o P,. I have read the definitions of both from the cfai material but they seem so similar in their explanation that I just dont understand/see the difference.The additional return plus the reset margin equals the discount margin.A discount margin (DM) is the average expected return earned in addition to the index underlying, or reference rate, of the floating rate security.For a bond trading at par, the discount margin equals the par floater spread.The size of the discount margin depends on the price of the floating rate security.They are: P the floating rate note's price plus any accrued interest c(i) the cash flow received at the end of time period i (for final period n, the principal amount must be included).Calculating the Discount Margin, another way to view the discount margin, is to think of it as the spread above the reference index that equates the present value of all expected future cash flows the current market price of the floating rate note in question.




Related to Discount Margin: Reset Margin, the average, expected return over a given reference rate for a floating-rate security.In general, the discount margin represents the average spread or margin over a reference rate the investor expects kamehameha schools song contest to receive over the underlying bonds life based on an assumption of the reference rate evolvement up until maturity date.Anyone have a basic concept of the two so I can understand better?There are seven variables involved in the formula.What is a 'Discount Margin - DM'.Three, should the floating rate bond be priced above par, the discount margin would equal the reference rate less the reduced earnings.Also found in: Dictionary, Thesaurus, Medical, Acronyms, Encyclopedia.Sponsored ads, home Financial Encyclopedia Derivatives D Discount Margin, a B,.It is often cardscodes discount voucher 2015 used to" the credit spread of a floater.


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