Bond Fundamentals (Part One)

Service Description

This course builds on the foundation of the session on bond fundamentals. Beginning with a quick review of cash flow projection and pricing, we then establish our understanding of the systematic factors that drive bond volatility and price change: yield change, duration and convexity. While these factors may seem complex and perhaps difficult to grasp, you will see that they are a natural extension of the ideas behind bond pricing that were introduced in the first session. We will examine the calculations of these risk factors and then apply this knowledge in two critical uses of bonds within client portfolios: funding future financial liabilities and controlling bond portfolio volatility to stay within each client’s risk tolerance.