Primary and Secondary Fixed-income Markets
AnalystPrep Summary Primary fixed-income markets allow governments, corporations, and other issuers to raise capital by issuing new bonds. Secondary fixed-income markets allow investors to trade existing bonds after issuance. Primary markets include public offerings, private placements, auctions, and underwriting arrangements….
Types of Fixed-income Indexes
AnalystPrep Summary Fixed-income indexes track the performance of groups of bonds and serve as benchmarks for portfolio managers and investors. They can represent broad bond markets or focus on specific sectors, credit qualities, maturities, geographic regions, currencies, or ESG criteria….
Fixed-income Segments, Issuers, and Investors
AnalystPrep Summary Fixed-income securities are commonly classified by time to maturity, issuer type, and credit quality. These classifications help investors compare bonds based on liquidity, interest rate risk, default risk, income needs, and investment objectives. The fixed-income market includes securities…
Legal, Regulatory, and Tax Implications on Fixed-income Securities
AnalystPrep Summary Legal, regulatory, and tax considerations influence how fixed-income securities are issued, traded, priced, and taxed. Bonds may be classified as domestic bonds, foreign bonds, Eurobonds, or global bonds depending on the issuer, market, currency, and regulatory jurisdiction. Investors…
Fixed-income Cash Flow Structures and Contingency Provisions
Introduction Fixed-income cash flow structures determine when investors receive interest and principal payments. Contingency provisions determine whether those cash flows may change in the future. Common structures include bullet bonds, fully amortizing bonds, partially amortizing bonds, floating-rate notes, zero-coupon bonds,…
Bond Indentures and Covenants
What Are Bond Indentures and Covenants? Every bond issue is governed by a legal agreement that defines the rights of investors and the obligations of the issuer. This agreement, known as the bond indenture, establishes the terms of the bond…
Features of a Fixed Income Security
What Are the Features of a Fixed-Income Security? A fixed-income security is a financial instrument that requires the issuer to make scheduled interest payments and repay the principal to investors according to predetermined terms. These securities include government bonds, corporate…
Types of Business Models
Conventional Business Models In practice, most business models consist of these conventional models either individually or combined. Common business models are described in the table below: In practice, most business models consist of these conventional models either individually or combined….
Annual Bond Yield: Different Compounding Periods
The yield on a bond is a measure of the return on investment, which depends on the interest rate and the frequency of compounding. Understanding how to calculate the annual yield for varying compounding periods is essential for investors to…
Yield and Yield Spread Measures for Fixed-rate Bonds
Yield Measures for Fixed-Rate Bonds Understanding yield measures for fixed-rate bonds is essential for investors aiming to assess the potential return on a bond investment. The yield measures, including current yield, yield to maturity (YTM), yield to call (YTC), and…
