Fixed Income Securities
Exam Weight: ~3 questions (2% of exam)
Fixed income securities are debt instruments that pay a stream of interest payments and return principal at maturity. This unit covers the different types of bonds, their issuers, and their unique characteristics. The next unit covers how to analyze and price these securities.
What You'll Learn
- U.S. government securities: Treasuries, TIPS, and agency securities
- Municipal bonds: GO bonds, revenue bonds, and tax-equivalent yield
- Corporate bonds: secured, unsecured, convertible, and zero-coupon
- Asset-backed securities: securitization and the SPV structure
- Foreign-issued bonds: sovereign debt, Eurobonds, and Yankee bonds
The Big Picture
Think of it this way: This unit is about learning what bonds are, who issues them, and their tax treatment. The next unit will teach you how bonds behave (pricing, yields, special features). Understanding what the securities are is essential before you can analyze how they perform.
| This Unit Covers | Next Unit Covers |
|---|---|
| What bonds are (types, issuers) | How bonds behave (pricing, yields) |
| Treasury, Agency, Corporate, Muni, Foreign | Premium, par, discount relationships |
| Tax treatment by issuer type | Yield calculations (CY, YTM, YTC) |