raising chicken helps you understand bond

two ways to classify the continum of bonds:

1 think this in terms of pecking orders of capital structure

this part is cleaned up and moved here:

blog.wenxuecity.com/myblog/67448/201501/7671.html

2 think of term structure of interest rate - ie bond of different maturity requires different yield

a. long-term bond pays more per year typically since it ties up your money longer; however short term interest is more sensitive to monetary policy;
b. when rate goes up, rates at all maturity go up; 90% of interest rate movement is parallel move; for same size interest rate movements, long-bond will move much more due to "duration" effect, ie you are stuck/lucky for a long time for existing coupon rate when market yield changes.
c. then there is "tilt" and "twist", which accounts for the remaining term structure movements.

just my 2c

所有跟帖： 

• bonds选择性也很多，每家公司都能提供不少，头痛。 -破烂熊- ♀ (0 bytes) () 01/07/2015 postreply 21:06:31

• 讲的太清楚了。听君一席话，胜读十年书啊 -SunnyCreeks- ♀ (0 bytes) () 01/07/2015 postreply 22:10:28