What you will learn
- Map face value and coupons to cash flows.
- Interpret yield and the duration approximation.
- Recognize default, liquidity and reinvestment uncertainty.
Before you begin
Be comfortable with percentages and the difference between a price and a cash payment.
Full lesson list
All lessons are freely available. No enrollment or payment is required.
Promised cash flows
- Map coupon rates to actual cash amounts.
- Distinguish face value from the price paid.
Yield and rate sensitivity
- Distinguish yield quotations from realized outcomes.
- Apply modified duration only as a local approximation.
Credit, liquidity and reinvestment
- Separate benchmark-rate and issuer-spread effects.
- Recognize why liquidity and reinvestment remain uncertain.