Bonds
Coupon, duration, put dates and yield to maturity — and why a bond's price falls when rates rise.
12 articles
The government bond market: who is in it and whyThe finance ministry borrows, banks and funds buy, and a private investor gets the reference point for everything else.
A checklist before buying a bondEight parameters of an issue, any of which changes the meaning of the yield you were shown.
A bond ladder: a way of not guessing ratesA portfolio of issues with staggered maturities removes the need to predict where rates are heading.
Credit ratings: what they assess and why they are not a guaranteeAn agency's opinion on an issuer's ability to pay its debts. A useful reference and a poor excuse for not thinking.
Bond amortisation: when principal comes back in instalmentsThe issuer repays the debt gradually. That lowers the risk and shortens the effective term of the investment at the same time.
Coupons and accrued interest: why you pay more than the priceBetween coupon dates the buyer reimburses the seller for the accrued part of the coupon. Not a cost, though it looks like one.
Substitute bonds: foreign-currency income inside a rouble contourAn instrument born from an infrastructure break: payments track a foreign currency while settlement happens domestically.
Inflation-protected bonds: how the principal is restatedThe coupon here is modest and the protection comes from indexing the principal. That changes both the yield calculation and the tax picture.
The put date: miss it and you are left holding a different bondThe right to present a bond for redemption runs in a narrow window. After it the issuer may reset the coupon.2 min
Yield to maturity: the only honest number a bond hasThe coupon rate describes the payments, the price describes the cost of entry. Yield to maturity joins them and is therefore comparable across issues.
Duration: why long bonds fall harderWhat duration actually is, how it differs from time to maturity, and how to use it when rates move.
Bonds from scratch: what the income is made ofFace value, coupon, price, accrued interest. How four quantities produce a yield and why it does not equal the coupon.