Route · 14 · 9 terms

Bonds

Bond cash flows, coupons, yield, maturity and rate risk.

Path goal: Separate coupon from yield and check repayment conditions.

Reading sequence

This editorial sequence preserves the Russian curriculum order and uses the existing translated guides.

Core explanations: start here if the topic is new.

Bonds: cash flow, obligations and non-payment risk
How to read a simple bond, distinguish par from price and check the risks around promised payments.
Coupon and yield: why the same rate can produce a different result
The difference between coupon rate, current yield, yield to maturity and the holder’s realized result.
Accrued coupon interest: why a bond’s full price differs from its quote
How accrued coupon interest allocates a coupon between holders, where costs arise and why accrued interest is not free profit.
Maturity, offer and early call: different events in a bond’s life
How to distinguish the final maturity, a holder’s right to tender a bond and an issuer’s right to end the debt early.
Bond interest-rate risk: why price changes while the coupon stays the same
The inverse relationship between price and required yield, the effect of maturity, duration limits and holding-to-maturity risks.

Additional concepts and practical connections after the foundation.

Amortizing bond: building cash flows from the remaining principal
Why principal repayment is not income and how a declining base changes later coupons.
Bond fund and individual bond: whose term ends?
Maturity of an issue is not the return of a fund-unit price; portfolio value, distributions and continuing interest-rate risk must be separated.
Reinvestment risk: why well-known coupons do not fix the final capital
Intermediate money, single future date and unknown rates
Amortized Cost of Debt: Why Interest Expense Is Different from
Trace the movement of the balance sheet liability between receipts
Floating coupon: index, spread and reset delay
How a known formula can leave the future cash payment unknown, and why a floating rate does not remove every risk.
Inflation-indexed bonds: what is actually linked to inflation
Indexation of principal or payment, index lag and purchase price explain why a label does not promise an investor’s personal real return.
Secured and subordinated debt: one “bond” label, different waterfalls
Why collateral, seniority and group position must be checked separately, and why collateral does not guarantee full recovery.
Zero-coupon bond: return between price and the single payment
How a discount becomes an annual rate, why there are no interim coupons and which risks remain until maturity.

Specialised models and limitations: check assumptions against the foundation.

Duration and convexity: how accurate is a bond’s linear estimate
Measure sensitivity to a small yield shift, calculate a second-order adjustment and understand the limits of one-rate analysis.

A debt instrument without periodic coupon payments; in a simple structure, the result is linked to the purchase price and the final payment.

A measure of a bond’s cash-flow timing and sensitivity to yield changes; the type of duration must be specified.

An interest payment on a bond whose amount and payment procedure are set by the issue terms.

The portion of a coupon accrued between payment dates and accounted for under the terms of the particular transaction.

A debt security with payment terms defined by the issue documents.

An interest payment determined by a formula with a changing reference value on specified dates and under specified rules.

Performance of the issue terms requiring the issuer to return the face amount or part of it.

Annual coupon income relative to a selected market price of the bond.

A measure of the curvature of the price–yield relationship under a selected cash-flow model.

Explore coupons, payments and yield to maturity.