Bonds 101

What you'll learn

• ✓Define face value, coupon, YTM
• ✓Understand the inverse price/yield relationship

Lessons

1. 📜
   You Lend to the Treasury

   What a bond actually is
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2. The Four Words

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3. Price and Yield Move Opposite

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4. The Two Risks

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5. Reading a Bond Quote

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6. Final Boss: Bonds in the Wild

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Sources

All content is drawn from the sources below. We deliberately avoid unverified material.

• Bonds (Investor.gov primer)
  US Securities and Exchange Commission · institutional
  Plain-English source for face value, coupon, maturity, yield, and quote conventions (price as percent of face).
  https://www.investor.gov/introduction-investing/investing-basics/investment-products/bonds-or-fixed-income-products/bonds
• Bond Markets, Analysis and Strategies (Frank J. Fabozzi)
  Pearson · book
  Reference for the inverse price/yield relationship, yield to maturity, duration, and dealer-driven bond market structure.
• Treasury Marketable Securities
  US Treasury / TreasuryDirect · institutional
  Source for Treasury auction structure and instrument descriptions (T-bills, T-notes, T-bonds).
  https://www.treasurydirect.gov/marketable-securities/
• Rating Symbols and Definitions
  Moody's Investors Service · institutional
  Authoritative source for Moody's rating scale and the Baa3 investment-grade cutoff.
  https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004
• S&P Global Ratings Definitions
  S&P Global · institutional
  Source for the S&P rating scale, plus and minus modifiers, and the BBB- investment-grade cutoff.
  https://www.spglobal.com/ratings/en/about/intro-to-credit-ratings
• Principles of Corporate Finance (Brealey, Myers, Allen)
  McGraw-Hill · book
  Reference for debt instruments, the bond pricing formula, and current yield vs YTM.
• Bond Market Structure and Trading (SEC Bulletins)
  US Securities and Exchange Commission · institutional
  Source for bid/ask spread behavior in OTC corporate bond trading versus exchange-listed stocks.
  https://www.sec.gov/investor/alerts/ib_corporatebonds.pdf