In Part I we describe the yield curve itself. The bulk of the discussion is in Chapter 1, which looks at the different types of yield curve and, more importantly, introduces the main theories of the yield curve. We also look at interpreting the curve. The language is non‐specialist and should be accessible to anyone with an involvement in the financial markets. This is followed by a look at spot and forward rates, and the derivation of such rates from market yields.
For this second edition we have relegated the introductory chapter on bond yield measurement to the main Appendix.