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FIXED INCOME SECURITIES
What is the relationship between bond price and yield?
Bond price and yield move in opposite directions — when yields rise, bond prices fall, and vice versa. This inverse relationship is fundamental to fixed income valuation.
What is a coupon bond and how does it make payments?
Bond paying periodic interest plus principal at maturity.
What does 'duration' measure in the context of a fixed income security?
Duration measures the weighted average time to receive all cash flows (coupons and principal) of a bond, expressed in years. It also serves as a measure of price sensitivity to interest rate changes.
What is the par value (face value) of a bond?
The principal amount repaid at maturity, typically Rs 100 or Rs 1000.
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