For a bond with a cash flow pattern the present value can be calculated ... Continue reading

# Fixed Income Securities

## Discounting of Cash Flows …

A zero coupon bond is a fixed income instrument with only one cash flow i.e. ... Continue reading

## Measuring Interest Rate Risk: Full Valua …

We know that bond prices are sensitive to interest rate changes. A portfolio ... Continue reading

## How to Value a Bond Using Forward Rates …

We have seen that a bond can be valued using spot rates by discounting each ... Continue reading

## How to Calculate Forward Rates from Spot …

Once we have the spot rate curve, we can easily use it to derive the forward ... Continue reading

## Option-adjusted Spreads (OAS) …

The Z-spread handles one problem present in nominal spread effectively, ... Continue reading

## Z-Spread: Definition and Calculation …

The problem with nominal spread is that it measures the spread at just one ... Continue reading

## Nominal Spread …

Nominal Spread, or the nominal yield spread, is the most simple yield spread ... Continue reading

## How to Price a Bond Using Spot Rates (Ze …

The simplest way to calculate the value of a bond is to take the cash flows ... Continue reading

## Bootstrapping Spot Rate Curve (Zero Curv …

A spot rate curve, also known as a zero curve refers to the yield curve ... Continue reading

## Cash Flow Yield …

For some debt products such as mortgage-backed securities, we calculate cash ... Continue reading

## How to Calculate Yield to Call of a Bond …

For callable bonds that are likely to be called before their maturity, it is ... Continue reading

## Calculate Bond-Equivalent Yield of Annua …

In the US, most bonds are generally semi-annual coupon paying bonds, so we ... Continue reading

## Factors Affecting Reinvestment Risk …

As we learned in the previous article, coupon paying bonds have reinvestment ... Continue reading

## YTM and Reinvestment Risk …

Yield to maturity calculates the total return an investor would earn by ... Continue reading

## Yield to Maturity (YTM) Approximation Fo …

Calculating yield to maturity can sometimes be a tedious process because we ... Continue reading

## Bond Equivalent Yield Convention …

In the bond market the convention is to annualize the semi-annual yield by ... Continue reading

## How to Calculate Yield to Maturity …

Yield to Maturity (YTM) is the most commonly used and comprehensive measure ... Continue reading

## How to Calculate Current Yield …

The current yield of a bond measures the interest income that an investor ... Continue reading

## Sources of Return from Investing in a Bo …

A fixed-income security, such as a bond, provides three different types of ... Continue reading