1. Introduction
  2. Bond Type Specifics
  3. Yield and Bond Price
  4. Term Structure of Interest Rates
  5. Duration
  6. Convexity
  7. Formula Cheat Sheet
  8. Conclusion

In their simplest form, bonds are pretty straightforward. After all, just about anyone can comprehend the borrowing and lending of money. However, like many securities, trading and analyzing bonds involves some more complicated underlying concepts.

The goal of this tutorial is to explain the more complex aspects of fixed-income securities. We'll reinforce and review bond fundamentals such as pricing and yield, explore the term structure of interest rates, and delve into the topics of duration and convexity. (Note: Although technically a bond is a fixed-income security with a maturity of ten years or more, in this tutorial we use the terms "bond" and "fixed-income security" interchangeably.)

The information and explanations in this tutorial assume that you have a basic understanding of fixed-income securities.

(If you feel you need a refresher, please see Bond Basics.)


Bond Type Specifics
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