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Bonds and Bond Yields

Home Training Fundamental Bonds and Bond Yields

Course Description

In this first module on bonds and bond yield we will introduce the defining features of Government and Corporate bonds with examples, including what concepts matter for investors and traders. We will begin with a definition of bonds as a ‘tradable debt instrument’ and some basic information on how they are different from loans and equities, how bonds trade and why they are issued. We will introduce what rights inventors have when selling the bonds before they reach maturity and what happens once an investor sells their bonds. We will use examples of German Government bonds or ‘Bund’ as well as a US Treasury Note to look at the important features of bonds. Coupon rates and maturity dates, and how the bond is impacted by these. We will look at how Bloomberg presents information and Analysis for the DBR or Bund, including the yield to maturity and your (IRR or) rates of return in different scenarios. You will learn basic terminology such as ‘bullet bonds’, ‘yield curve’ and ‘bid to ask spread’. This module will introduce you to the key aspects of the changes in yield and price, using an example yield curve to show the idea that over time yield curves change according to expectations of the economics of a government as well as it’s currency and how this impacts the yield to maturity of a bond.
The Video runs for about 25 minutes, please also look at the accompanying document ‘Bond Yields’.

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