Bonds in a Day

About the Author

1. Introduction

2. 'Piero the Gouty' and Other Interesting People
2.1 Confounding compounding
2.2 Example of interest over one year
2.3 Example of compound interest over more than one year
2.4 Example of compound interest over more than one year - the easy way
2.5 Some tips on using spreadsheets
2.6 The power of compounding
2.7 But I want my antipasti!
2.8 Example of calculating the required rate of interest
2.9 Don't dismiss discounting
2.10 Example of discounting for one year
2.11 Example of discounting over more than one year
2.12 Pricing a bond
2.13 Example of pricing a bond when the interest rate and yield are the same
2.14 Example of pricing a bond when the interest rate and yield aren't the same
2.15 Monkeys eat bananas upside down
2.16 Example of day-count differences
2.17 Pricing a bond - the short way

3. Stop Being an Adolescent - Yield to Maturity!
3.1 Calculating yield to maturity
3.2 A very inconvenient relationship
3.3 Things to notice about the price/yield relationship
3.4 In for the duration: Macaulay and modified duration
3.5 Example of using modified duration to reprice a bond
3.6 Duration's less good-looking brother - convexity
3.7 Example of correcting for the effect of convexity
3.8 Calculating convexity using a spreadsheet

4. Never Mind the Yield - Feel the Total Return
4.1 Method for total return analysis
4.2 Example of the total return calculation

5. Be a Freud - be Very a Freud
5.1 Computing total rates of return over an investment horizon
5.2 Example of horizon analysis
5.3 Scenario analysis
5.4 Example of scenario analysis under various yield shifts

6. Is the Yield Curve Just a Capitalist Plot?
6.1 Yield curve steepness
6.2 The yield curve and the economic cycle
6.3 Yield curve theories

7. When Nothing is the Best Thing You Can Do...
7.1 Example of the passage of time

8. Individual Bonds Versus Portfolios

9. Man is Born Free, and Everywhere he is in Bonds
9.1 The non-government bond markets
9.2 Assessing the adequacy of non-government bond yields
9.3 Method for corporate bond total return analysis
9.4 Example of a non-government bond total return analysis

10. Bringing it All Together
10.1 Method for multi-variable total return analysis
10.2 Example of multi-variable total return analysis

11. Outro...