Risk

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 riskless yield curve.

The full YouTube playlist of Securities Investment 101 lecture videos can be found by clicking here.

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In 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 curve usually occurs, and why this makes it a good leading economic indicator for predicting near-term recessions.

Along the way, we also introduce Zero-Coupon bonds, which are bonds with a single principal maturity payment without any intervening coupon-interest payments.

The full YouTube playlist of Securities Investment 101 lecture videos can be found by clicking here.

Please read our disclaimer.

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The Four Main Features of a Bond, Lecture 008, Securities Investment 101

June 1, 2013

In this lecture we discuss the four main features of a bond, which are the face value, the maturity or redemption date, the coupon rate, and the issuer name and associated risk rating. Many subsidiary topics pop up along the way, including lots of jargon terms used to describe bonds, the difference of the nature […]

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