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Fixed Income Markets

Higher yields discount fixed future payments more heavily.

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Markets, Investments and Risk

Why does a fixed coupon lose value when market yields rise? An annual-pay plain bond pays a fixed coupon and returns principal at maturity if the issuer performs. The yield is the single discount rate that reproduces the price from promised cash flows.

Price a bondFoundation · Quick, Deep, ApplyEstimate bond rate sensitivityIntermediate · Quick, Deep, ApplyPrerequisite · Expected value

Use the linked prerequisite and related topics to build your path.