18
Bonds I: Prices and yields
- The basics
- Bond valuation
- Prices, interest rates, and discount rates
- The yield to maturity
- The effective yield to maturity
- An example
- The big picture
- Excel section
Some people think that bonds are boring, some others think they’re for wimps. Whatever you think about them, the truth is that bonds are an asset class that financial markets could hardly live without. In this and the next two chapters we’ll discuss issues that will help you understand their risk and return characteristics, as well as many of those things you probably always wanted to know about bonds but were afraid to ask.
The basics
A bond is just a loan in which the issuer is the borrower and the buyer is the lender. The maturity date is the time ...
Get The Financial Times Guide to Understanding Finance, 2nd Edition now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
