About This Chapter
Fixed-Income Securities - Chapter Summary
This online chapter offers access to a variety of engaging lessons designed to improve your comprehension of fixed-income securities. These lessons delve into topics that include bond valuation, credit risk, yield spread and methods of credit risk management. Feel free to review this chapter at your own pace. When finished, you will be able to:
- Define and list types of fixed-income securities
- Describe the characteristics and issuing procedures of bonds
- List types of government securities
- Understand bond market strategies
- Explain the term structure of interest rates and models of interest rate risk
- Detail how securities prices are impacted by option characteristics
- Discuss the purpose of structured products
- Share differences between fixed-income portfolios and investment portfolio types
Tailor your review of this chapter to your unique study needs and personal schedule. Lessons are available around-the-clock via any computer or mobile device and can be navigated in any sequence you desire. Feel free to take a multiple-choice quiz before, during or after reviewing each lesson to gauge your comprehension of its contents. A practice exam is available to test your overall knowledge of fixed-income securities.
1. Fixed-Income Securities: Definition & Types
This lesson takes you through the world of fixed income securities. You will learn what they are and how they are classified with the help of examples for each one.
2. Bonds: Types, Characteristics and Issuing Procedures
In this lesson, you will learn about some of the more common types of bonds and their characteristics. Bonds include: secured and unsecured bonds, term and serial bonds, registered and bearer bonds, and convertible and callable bonds.
3. Government Securities: Definition, Types & Examples
Governments need money to operate and, just like people and businesses, they will borrow money when needed. In this lesson, you'll learn about government securities.
4. Bond Markets: Analysis & Strategies
Bonds may not be the most exciting investment opportunity, but they serve a valuable role in providing stability for an investment portfolio. Let's take a look at what investors need to know about bond purchases and strategy.
5. Bond Valuation: Formula, Steps & Examples
In this lesson, you'll learn the steps required to determine the value of a bond. You'll also learn how to come up with an appropriate discount rate to use in the bond value calculation.
6. Term Structure of Interest Rates: Definition & Overview
In this lesson, you will learn the definition of the term structure of interest rates and its related concepts. The behavior of this fundamental benchmark of interest rate is followed by all the economic agents in the setting of the macro economy.
7. Interest Rate Risk: Definition, Formula & Models
Interest rate risk is really the risk of two different events (price reduction and reinvestment rate reduction) caused by a change in interest rates. Interest rate risk affects bond investments, but the good news for bond investors is that it can be mitigated or eliminated.
8. What is Credit Risk? - Definition & Examples
When you go and buy a car or a house, companies will assess your credit risk before allowing you to make such a big purchase. Learn why and how they do this in this lesson.
9. Credit Risk Management Methods
In this lesson, we'll define bonds. You'll learn about the characteristics of bonds and their rating system. We'll also explore two risk related concepts: risk-neutral and real-world.
10. Yield Spread: Definition & Measure Types
In this lesson, we will discuss how to compare fixed-income investments using yield spreads. This is a useful topic to know to compare the relative attractiveness of bond investments.
11. How Option Characteristics Affect Securities Prices
This lesson explores securities commonly affected by option characteristics, including callable municipal bonds and mortgage-backed securities. You'll learn to identify embedded options and discover how option characteristics impact security prices.
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Other chapters within the Chartered Financial Analyst (CFA): Exam Prep & Study Guide course
- About the CFA Exam
- Ethical & Professional Standards in Finance
- Quantitative Methods in Finance
- Overview of Economics in the Financial Market
- Domestic Economic Concepts
- International Trade & Currency Exchange
- Overview of Financial Reporting & Analysis
- Types of Financial Reporting & Analysis
- Understanding Corporate Finance
- Equity Investments
- Derivatives in Finance
- Alternative Investments
- Overview of Portfolios
- Portfolio Management Strategies
- Portfolio Performance Analysis