In today’s lecture, we examine the ‘special’ yield curve known as the ‘riskless’ yield curve and how we define it and its terms. Once we have this special yield curve defined, we then talk about credit spreads, which are essentially the difference in yields between bonds of the same maturity, particularly as compared to the […]

# 101 Courses

## The Riskless Yield Curve & Credit Spreads, Lecture 017, Securities Investment 101

June 24, 2013## The Inverted Yield Curve, Lecture 016, Securities Investment 101

June 19, 2013In this lecture we describe the inverted yield curve and how it differs from the normal yield curve. Before we get to that, we explain the strategy of ‘riding the yield curve’ and then why the inverted yield curve is such a dangerous thing when riding the yield curve. We explain why the inverted yield […]

## The Yield Curve, Lecture 015, Securities Investment 101

June 17, 2013In this lecture, we introduce the yield curve, which lies at the base of most cashflow trading. We explain liquidity preference theory, which determines the typical ‘standard’ shape of the yield curve, and how risk and reward, measured by credit risk and opportunity risk, create the standard yield curve. It must be noted, however, that […]

## Introducing Yield To Maturity, Lecture 012, Securities Investment 101

June 11, 2013In this introductory lecture, we explain the conceptual framework behind ‘Yield To Maturity’ and why it is conceptually different from ‘Flat Yield’. In the next two lectures, we will further explore the ideas put forward in this lecture, and both price a bond, given a yield to maturity input, and calculate a yield to maturity, […]

## The Flat Yield of a Bond, Lecture 011, Securities Investment 101

June 10, 2013In this lecture we examine the simplest bond yield measurement, the ‘Flat Yield’, which is a measure of the periodic income of a bond divided by its initial price. The long-term redemption and capital return values of a bond are irrelevant when considering the flat yield of a bond, which is also known as the […]

## The Time Value of Money, Lecture 010, Securities Investment 101

June 8, 2013To help understand how bonds and many financial products are priced, we need to understand the ‘Time Value of Money’. We discuss the underlying axiom of human action behaviour and motivation which lies under this mechanism, and then explain how present values and future values of money are related, and how to calculate one from […]