Fixed-rate bonds: coupon, yield, maturity and a rate-shock explanation
Markets & wealth · L2 · en
- Suitable for
- Readers who meet the stated knowledge prerequisites and want to explain the selected concepts.
- Learning goals
- Distinguish fixed coupon payment from discount yield and resale price in a dated fictional schedule.
- Reprice unchanged fictional cash flows under a 100 basis-point nominal-yield shock.
- Explain maturity/coupon sensitivity and the limited effect of cash weighting under a stated instantaneous-price scenario.
- Knowledge prerequisites
- Percent/decimal conversion and present-value discounting.; Distinguish annual nominal yield and periodic yield.
- Pathline suggested preparation
- Read the bulletin rate/price section before comparing coupon and maturity.
- Duration
- 55 minutes (Pathline estimate)
- Source practice
Source exercises: Not applicable
Source feedback: Not applicable
Executable practice: Not applicable
- Source answers
- Not applicable
This status applies only to this unit; check its limitations for task coverage. Feedback is listed separately.
- Access for this unit
- Public and free. Selected source text was readable without registration in this observation; other services and region availability were not evaluated.
- Environment
- Platform requirements not confirmed. Read in a browser or PDF viewer; original examples can be explored with paper, a calculator or a locally available tool. No internal files, supplied code or hosted runtime is offered.
Next action: Read the rate/price examples, Coupon Rates and Maturity sections. For optional original practice, hold a fictional cash-flow schedule fixed while changing its discount yield.
Open this source unit ↗Pathline practice suggestions
These are suggested actions; they do not imply a source exercise, automatic feedback or completion record.
- Pathline fictional example: use USD 2,000 face value, a 4.5% annual coupon paid semiannually, eight equal half-year periods, coupon-date settlement on 2026-10-13 and redemption on 2030-10-13. Discount the unchanged coupon and redemption payments at 4.5% and 5.5% annual nominal yields, divided by two for each period; explain the price change.
- Pathline comparison idea: keep the yield pair fixed while varying maturity or coupon, then state how a 40% bond/60% cash weighting changes the instantaneous portfolio price shock under unchanged cash value. State the assumptions before comparing percentages.
Limitations to check
- Published 2013-06-26; no separate content revision was established. The bulletin is historical U.S. investor education, not current yields, legal interpretation or Hong Kong product-suitability guidance.
- The fictional model uses coupon-date settlement and equal half-year periods. It excludes accrued interest, actual daily day-count conventions, business-day adjustment, default, tax, FX, call options and reinvestment.
- An instantaneous price shock is not realized holding-period return or a promised YTM outcome. Cash weighting is conditional on this model; source examples do not establish provider exercises, feedback or an executable tool.
- Goals, prerequisites, preparation, task level and original practice ideas are Pathline research analysis, not automatically source-declared requirements. The duration is an unmeasured researcher estimate.
- Original examples are self-check ideas, not provider grading or evidence of learner mastery. Human professional review, student outcomes and wider environment tests have not been performed.
Learning source and review reference
Source version: 2013-06-26 publication; content revision unknown (no separately identified revision) · Unit ER-20261013-02-WP04-0001-INVESTOR-BULLETINS-86-UNIT-01, version 1 · Review ER-MINIMUM-A0-WP04-final-ER-20261013-02-WP04-0001-V1-001