Government bonds and Treasury bills
Local-currency government debt; maturity, coupon structure and auction terms vary by instrument.
FINRATEX · FIXED INCOME DESKUnderstand the bond
Understand the bond
before reading its yield.
Compare bond structures, see why price and yield move in opposite directions, and test a bond with your own assumptions.
Same word, different risks
Currency, issuer, maturity, coupon and liquidity determine what you actually own.
Eurobonds
Usually long-dated foreign-currency debt carrying both currency and sovereign-risk exposure.
Corporate bonds and notes
Yield must be weighed against issuer credit quality, security structure and market liquidity.
Lease certificates / sukuk
Participation-finance instruments backed by assets or rights; contract and cash-flow structure matter.
BOND WORKBENCH
Test price, coupon and maturity
Use your own figures. Results are educational approximations, not a quoted market price.
Why do price and yield move in opposite directions?
Market yields rise
New bonds offer a higher return than the older fixed coupon.
Old coupon loses appeal
Investors demand compensation for holding the lower coupon.
Bond price falls
The lower price lifts the bond's effective yield toward the market.
Five fields that change the answer
FieldWhat it tells youMain question
CurrencyThe unit of cash flowsDo you also carry FX risk?
MaturityHow long principal stays exposedCan you wait until redemption?
CouponScheduled cash paymentsFixed, floating or zero coupon?
CreditIssuer's repayment capacityWhat supports repayment?
LiquidityEase of selling before maturityWhat spread applies today?
Yield is only one line of the story
Interest-rate risk
Longer maturities usually react more to yield changes.
Credit risk
A high yield can reflect weaker repayment capacity.
Currency risk
FX moves can outweigh the bond's coupon return.
Inflation risk
Nominal cash flows may lose purchasing power.
OFFICIAL REFERENCE DESK