Bond Duration and Convexity Simplified – Part 1 of...- While analyzing bonds, it is important to apply the concepts of duration and convexity. Duration has...
COURSE
Risks of Investing in Bonds
- As we learnt in [part 1](https://financetrain.com/bond-duration-and-convexity-simplified-part-1-of-2...
- Bonds are a lucrative investment class for investors and portfolio managers. However, just like any ...
- The investors in bonds face interest rate risk because the price of the bond is inversely proportion...
- We know that a [bond’s price is inversely related to the yield](https://financetrain.com/understandi...
- In the previous article we learned about how maturity, coupon, and embedded options impact interest ...
- The debt securities issued in the market can have many features; one such feature is an embedded opt...
- In case of fixed-rate bonds, the coupon is set as a reference rate plus a margin. Since the referenc...
- We know that the bond prices are sensitive to changes in interest rates. When interest rates increas...
- A bond may have a call provision that allow the issuer to call the bond back before its maturity dat...
- Investors in fixed income securities, such as bonds, face reinvestment risk. The risk arises from th...
- The investors in a bond issue also face credit risk as they are actually lending money to the issuer...
- Investors in bonds also face liquidity risk. This is the risk that the investor may have to sell the...
- Some bonds and other fixed income products also expose the investor to exchange rate risk (also know...
- Almost all bonds expose an investor to inflation risk, also known as purchasing power risk. It is a ...
- [Bonds with embedded options](https://financetrain.com/common-options-embedded-in-a-bond-issue/ "Com...
- **Event Risk** The investors in bonds may also face event risk, i.e., the risk that the issuer will...
LESSONS
Bond Duration and Convexity Simplified – Part 2 of...
Key Risks Associated with Investing in Bonds
Understanding Inverse Price/Yield Relationship in ...
Bond Features Affecting Interest Rate Risk
Impact of Yield Level on Bond’s Price Sensitivity
Price of a Callable Bond
Interest Rate Risk of Floating-rate Bonds
Yield Curve Risk
Call and Prepayment Risk
Reinvestment Risk in Bonds
Credit Risk in Bonds
Liquidity Risk in Bonds
Exchange Rate Risk in Bonds
Inflation Risk in Bonds
Volatility Risk in Bonds with Embedded Options
Event Risk and Sovereign Risk in Bonds
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