Understanding Bond Yields and Analysis

Bond Analysis

Understanding fixed income markets.

Bond Basics

Key Terms

• Yield: Return on investment
• Coupon: Interest payment
• Maturity: When bond expires
• Duration: Interest rate sensitivity

Yield Types

Current Yield

• Annual coupon / price
• Simple calculation

Yield to Maturity (YTM)

• Total return if held to maturity
• Includes price appreciation

Yield Curve

• Yields across maturities
• Economic indicator

Bond Ratings

RatingMeaning AAAHighest quality AAHigh quality AStrong BBBAdequate Below BBBSpeculative

Using Bond Data

• Compare to pool yields
• Understand credit quality
• Track interest rate trends