PREFACE TO THE FIRST EDITION
The bond markets are an important part of the global financial markets, and a vital conduit through which capital is raised and invested. Over the last two decades the growth in trading volumes has been accompanied by the introduction of ever-more sophisticated financial-engineering techniques, such that the bond markets today comprise trading in a large variety of structures. Banks can tailor packages to suit the most esoteric of requirements for their customers, so that bond cash flows and the hedging instruments available for holders of bonds can be far removed from the conventional fixed interest instruments that originally made up the market. Instruments are now available that will suit the needs of virtually all users of the financial markets, whether they are investors or borrowers.
The purpose of this book is to provide an introductory description and analysis of the bond markets as a whole. However, we seek to leave the reader with sufficient information and worked examples to enable him or her to be at ease with all the different aspects of the markets. Hence we begin by considering basic ‘plain vanilla’ bonds and elementary bond mathematics, before looking at the array of different instruments available. This includes an overview of off-balance sheet instruments and their uses. We also consider the analytical techniques used by the markets, and basic trading and hedging strategy.
This book is aimed at those with little or no previous ...