Bonds: The Full Lesson

A bond is a loan with a price, and that price moves in the opposite direction to yield. This is the whole bond section in one run. It covers what a bond actually promises, how a price is built from the coupons and the face value, why a higher required yield means a lower price, what happens when you sell before maturity, and how duration measures the pull of time on that price. Par, premium and discount are worked through with numbers rather than defined. Every figure is computed on screen. Pause before each answer and try it first.