---
title: "VIDEO: Linear Algebra of Public Finance Debt Sizing | Intuitive Analytics"
description: This blog video explains the linear algebra required for public finance bond sizing and structuring.
---

# VIDEO: Linear Algebra of Public Finance Debt Sizing

 Posted by Peter Orr on Mar 13, 2013

"If people do not believe that mathematics is simple, it is only because they do not realize how complicated life is."  - John Louis von Neumann 

Many masters of the universe IB types think public finance is akin to Michael Lewis’ (in)famous "[equities in Dallas](http://www.amazon.com/Liars-Poker-Michael-Lewis/dp/039333869X)" assignment offered to the lower tier analysts post training.  But that perception is largely because they don't know that some of the peculiarities that make munis munis also make it interesting, unique, and frankly more quantitatively challenging then corporate finance. 

This video from our [Resources](https://www.intuitive-analytics.com/Resources/clients/) page introduces linear algebra (via [MATLAB](http://www.mathworks.com/)) as an integral part of understanding what’s really going on when sizing and structuring public finance bond deals. We quickly explain (perhaps review) a few basic concepts in linear algebra and then plunge headlong into sizing a simple 3 bond example using linear algebra and the canonical system of equations expressed by Ax=b. 

As this our first entry in the “propeller head” category of resources, we’d love to hear your thoughts! 

### Comments

### Subscribe to our Articles

### Browse by Tag **

- [public finance (17)](https://www.intuitive-analytics.com/blog/topic/public-finance)
- [refunding (15)](https://www.intuitive-analytics.com/blog/topic/refunding)
- [public finance analytics (14)](https://www.intuitive-analytics.com/blog/topic/public-finance-analytics)
- [Financial Decisions (13)](https://www.intuitive-analytics.com/blog/topic/financial-decisions)
- [advance refunding (13)](https://www.intuitive-analytics.com/blog/topic/advance-refunding)
- [bond option (13)](https://www.intuitive-analytics.com/blog/topic/bond-option)
- [public finance software (12)](https://www.intuitive-analytics.com/blog/topic/public-finance-software)
- [call option (11)](https://www.intuitive-analytics.com/blog/topic/call-option)
- [interest rate model (9)](https://www.intuitive-analytics.com/blog/topic/interest-rate-model)
- [municipal finance software (9)](https://www.intuitive-analytics.com/blog/topic/municipal-finance-software)
- [SIFMA (8)](https://www.intuitive-analytics.com/blog/topic/sifma)
- [Financial Models (7)](https://www.intuitive-analytics.com/blog/topic/financial-models)
- [debt structuring (7)](https://www.intuitive-analytics.com/blog/topic/debt-structuring)
- [yield curve modeling (7)](https://www.intuitive-analytics.com/blog/topic/yield-curve-modeling)
- [decision support (6)](https://www.intuitive-analytics.com/blog/topic/decision-support)
- [financial analysis (6)](https://www.intuitive-analytics.com/blog/topic/financial-analysis)
- [financial model (6)](https://www.intuitive-analytics.com/blog/topic/financial-model)
- [libor (6)](https://www.intuitive-analytics.com/blog/topic/libor)
- [refunding efficiency (6)](https://www.intuitive-analytics.com/blog/topic/refunding-efficiency)
- [Finance Professionals (5)](https://www.intuitive-analytics.com/blog/topic/finance-professionals)
- [bond sizing (5)](https://www.intuitive-analytics.com/blog/topic/bond-sizing)
- [financial economy (5)](https://www.intuitive-analytics.com/blog/topic/financial-economy)
- [financial forecasting (5)](https://www.intuitive-analytics.com/blog/topic/financial-forecasting)
- [municipal swaps (5)](https://www.intuitive-analytics.com/blog/topic/municipal-swaps)
- [swaps (5)](https://www.intuitive-analytics.com/blog/topic/swaps)
- [tax-exempt financing (5)](https://www.intuitive-analytics.com/blog/topic/tax-exempt-financing)
- [Financial Software (4)](https://www.intuitive-analytics.com/blog/topic/financial-software)
- [Financial Technology (4)](https://www.intuitive-analytics.com/blog/topic/financial-technology)
- [Wall Street (4)](https://www.intuitive-analytics.com/blog/topic/wall-street)
- [callable bonds (4)](https://www.intuitive-analytics.com/blog/topic/callable-bonds)
- [refunding adjusted yield (4)](https://www.intuitive-analytics.com/blog/topic/refunding-adjusted-yield)
- [risk in finance (4)](https://www.intuitive-analytics.com/blog/topic/risk-in-finance)
- [tax risk (4)](https://www.intuitive-analytics.com/blog/topic/tax-risk)
- [Financial Engineers (3)](https://www.intuitive-analytics.com/blog/topic/financial-engineers)
- [Intuitive Analytics (3)](https://www.intuitive-analytics.com/blog/topic/intuitive-analytics)
- [Risk Management (3)](https://www.intuitive-analytics.com/blog/topic/risk-management)
- [SIFMA/LIBOR (3)](https://www.intuitive-analytics.com/blog/topic/sifmalibor)
- [SIFMA/LIBOR ratios (3)](https://www.intuitive-analytics.com/blog/topic/sifmalibor-ratios)
- [Spreadsheets (3)](https://www.intuitive-analytics.com/blog/topic/spreadsheets)
- [business process (3)](https://www.intuitive-analytics.com/blog/topic/business-process)
- [debt profiling (3)](https://www.intuitive-analytics.com/blog/topic/debt-profiling)
- [hedging (3)](https://www.intuitive-analytics.com/blog/topic/hedging)
- [monte carlo (3)](https://www.intuitive-analytics.com/blog/topic/monte-carlo)
- [press (3)](https://www.intuitive-analytics.com/blog/topic/press)
- [pv savings (3)](https://www.intuitive-analytics.com/blog/topic/pv-savings)
- [refundings (3)](https://www.intuitive-analytics.com/blog/topic/refundings)
- [variable rate (3)](https://www.intuitive-analytics.com/blog/topic/variable-rate)
- [BABs (2)](https://www.intuitive-analytics.com/blog/topic/babs)
- [Behavioral Finance (2)](https://www.intuitive-analytics.com/blog/topic/behavioral-finance)
- [CFaR (2)](https://www.intuitive-analytics.com/blog/topic/cfar)
- [Economist (2)](https://www.intuitive-analytics.com/blog/topic/economist)
- [Financial Services (2)](https://www.intuitive-analytics.com/blog/topic/financial-services)
- [Fischer Black (2)](https://www.intuitive-analytics.com/blog/topic/fischer-black)
- [Investment Banks (2)](https://www.intuitive-analytics.com/blog/topic/investment-banks)
- [Risk Metrics (2)](https://www.intuitive-analytics.com/blog/topic/risk-metrics)
- [Tax and Accounting Issues (2)](https://www.intuitive-analytics.com/blog/topic/tax-and-accounting-issues)
- [build america bonds (2)](https://www.intuitive-analytics.com/blog/topic/build-america-bonds)
- [cash flow at risk (2)](https://www.intuitive-analytics.com/blog/topic/cash-flow-at-risk)
- [database (2)](https://www.intuitive-analytics.com/blog/topic/database)
- [debt service chart (2)](https://www.intuitive-analytics.com/blog/topic/debt-service-chart)
- [financial risk (2)](https://www.intuitive-analytics.com/blog/topic/financial-risk)
- [linear algebra (2)](https://www.intuitive-analytics.com/blog/topic/linear-algebra)
- [muni (2)](https://www.intuitive-analytics.com/blog/topic/muni)
- [municipal default (2)](https://www.intuitive-analytics.com/blog/topic/municipal-default)
- [municipal investor (2)](https://www.intuitive-analytics.com/blog/topic/municipal-investor)
- [probability (2)](https://www.intuitive-analytics.com/blog/topic/probability)
- [public finance marketing (2)](https://www.intuitive-analytics.com/blog/topic/public-finance-marketing)
- [variable rate bonds (2)](https://www.intuitive-analytics.com/blog/topic/variable-rate-bonds)
- [(Un)Calculated Risk (1)](https://www.intuitive-analytics.com/blog/topic/uncalculated-risk)
- [Financial Management (1)](https://www.intuitive-analytics.com/blog/topic/financial-management)
- [Intellectual Property (1)](https://www.intuitive-analytics.com/blog/topic/intellectual-property)
- [Maximum Annual Debt Service (MADS) (1)](https://www.intuitive-analytics.com/blog/topic/maximum-annual-debt-service-mads)
- [Organization for Economic and Co-Operation and Dev (1)](https://www.intuitive-analytics.com/blog/topic/organization-for-economic-and-co-operation-and-dev)
- [Peter Orr (1)](https://www.intuitive-analytics.com/blog/topic/peter-orr)
- [SmartModels Stage III (1)](https://www.intuitive-analytics.com/blog/topic/smartmodels-stage-iii)
- [The Program for International Student Assessment ( (1)](https://www.intuitive-analytics.com/blog/topic/the-program-for-international-student-assessment)
- [Treasury Debt (1)](https://www.intuitive-analytics.com/blog/topic/treasury-debt)
- [VaR (1)](https://www.intuitive-analytics.com/blog/topic/var)
- [Weighted Average Life (1)](https://www.intuitive-analytics.com/blog/topic/weighted-average-life)
- [Win Smith (1)](https://www.intuitive-analytics.com/blog/topic/win-smith)
- [credit (1)](https://www.intuitive-analytics.com/blog/topic/credit)
- [cusip (1)](https://www.intuitive-analytics.com/blog/topic/cusip)
- [debt service graph (1)](https://www.intuitive-analytics.com/blog/topic/debt-service-graph)
- [escrow (1)](https://www.intuitive-analytics.com/blog/topic/escrow)
- [future tax rates (1)](https://www.intuitive-analytics.com/blog/topic/future-tax-rates)
- [interest rate markets (1)](https://www.intuitive-analytics.com/blog/topic/interest-rate-markets)
- [libor swaps (1)](https://www.intuitive-analytics.com/blog/topic/libor-swaps)
- [markets (1)](https://www.intuitive-analytics.com/blog/topic/markets)
- [monte carlo method (1)](https://www.intuitive-analytics.com/blog/topic/monte-carlo-method)
- [monte carlo model (1)](https://www.intuitive-analytics.com/blog/topic/monte-carlo-model)
- [municipal data (1)](https://www.intuitive-analytics.com/blog/topic/municipal-data)
- [negative arbitrage (1)](https://www.intuitive-analytics.com/blog/topic/negative-arbitrage)
- [optimization (1)](https://www.intuitive-analytics.com/blog/topic/optimization)
- [smartmodels utilities (1)](https://www.intuitive-analytics.com/blog/topic/smartmodels-utilities)
- [swaps that swallow town (1)](https://www.intuitive-analytics.com/blog/topic/swaps-that-swallow-town)
- [tax policy (1)](https://www.intuitive-analytics.com/blog/topic/tax-policy)
- [workflow (1)](https://www.intuitive-analytics.com/blog/topic/workflow)

[View all +](https://www.intuitive-analytics.com/blog/bid/58297/VIDEO-Linear-Algebra-of-Public-Finance-Debt-Sizing#blog-sidebar-tags)