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Fixed Income

Bond pricing, yields, duration, convexity, the yield curve and credit spreads (including sukuk structures).

5 lessons · 18 exercises · about 2 hours · 1 free lessons

You will be able to

  • Read a bond's terms and turn them into its cash flows and the cash price of a trade
  • Price a bond from its yield and solve for yield to maturity from its price
  • Calculate accrued interest and move between clean and dirty prices
  • Measure interest-rate risk with Macaulay and modified duration and estimate price changes

Designed for: Analysts, treasury and banking staff, investors and finance students who need to price bonds and explain how they react to interest rates.

Fixed Income Core

Module 1 · Bond basics

  1. How bonds workFace value, coupon, frequency and maturity — and how a quoted price per 100 becomes a cash amount.16 minFree
  2. Pricing a bondA bond's price is the present value of its coupons and principal at the market's required yield.20 minMembers
  3. Yield to maturitySolve for the single discount rate that equates a bond's cash flows to its price — and quote it correctly.22 minMembers
  4. Clean and dirty pricesAccrued interest, the clean price the market quotes and the dirty price the buyer actually pays.22 minMembers

Module 2 · Interest-rate risk

  1. Macaulay and modified durationMeasure how far a bond's price moves when yields change — and why long, low-coupon bonds move most.24 minMembers