Fixed Income

In this section

• Chapter 1: Fixed-Income Markets and Instruments
  Chapter 1: Fixed-Income Markets and Instruments (CFA Level 1): Practical explanations of core ideas, with key terms, formulas, and common exam pitfalls.
  • Overview of Fixed-Income Securities and Markets
    Overview of Fixed-Income Securities and Markets (CFA Level 1): Key Characteristics of Fixed-Income Securities, Major Types of Issuers, and Comparing Fixed-Income and Equity Markets. Key definitions, formulas, and exam tips.
  • Roles and Participants in the Bond Market
    Roles and Participants in the Bond Market (CFA Level 1): Key Issuers, Governments, and Municipalities and Local Authorities. Key definitions, formulas, and exam tips.
  • Key Issuer Sectors and Classifications
    Key Issuer Sectors and Classifications (CFA Level 1): Sovereign Issuers, Non-Sovereign and Municipal Issuers, and Quasi-Governmental Agencies. Key definitions, formulas, and exam tips.
  • Secondary Trading, Liquidity, and Market Regulation
    Secondary Trading, Liquidity, and Market Regulation (CFA Level 1): Structure of Secondary Trading, Determinants of Market Liquidity, and Market Structures: Quote-Driven vs. Order-Driven. Key definitions, formulas, and exam tips.
  • Electronic Trading Platforms and Market Innovations
    Electronic Trading Platforms and Market Innovations (CFA Level 1): Emergence of eTrading Platforms, Key eTrading Models, and Request-for-Quote (RFQ). Key definitions, formulas, and exam tips.
  • Bond Market Indexes and Benchmark Construction
    Bond Market Indexes and Benchmark Construction (CFA Level 1): Purpose of Bond Market Indexes, Key Elements of Bond Index Construction, and Selection Criteria. Key definitions, formulas, and exam tips.
  • Impact of Global Macroeconomic Factors on Fixed-Income Markets
    Impact of Global Macroeconomic Factors on Fixed-Income Markets (CFA Level 1): Macroeconomic Indicators and Their Influence on Bond Yields and Central Bank Monetary Policy and Quantitative Easing. Key definitions, formulas, and exam tips.
  • Market Liquidity Stress Events and Regulatory Responses
    Market Liquidity Stress Events and Regulatory Responses (CFA Level 1): Defining Liquidity Stress and Why It Matters, Key Symptoms of Liquidity Stress, and Famous Historical Liquidity Events. Key definitions, formulas, and exam tips.
  • Emerging Market Debt and Currency Considerations
    Emerging Market Debt and Currency Considerations (CFA Level 1): Sovereign vs. Corporate Emerging Market Debt, Growth of EM Corporate Issuance, and Unique Risks. Key definitions, formulas, and exam tips.
  • The Role of Fixed Income in Multi-Asset Portfolio Construction
    The Role of Fixed Income in Multi-Asset Portfolio Construction (CFA Level 1): Rationale for Bonds in Multi-Asset Portfolios, Stabilizing Influences, and Diversification and Correlation. Key definitions, formulas, and exam tips.
  • Digital Platforms for Retail Bond Investors and Settlement
    Digital Platforms for Retail Bond Investors and Settlement (CFA Level 1): Key Drivers Transforming Retail Bond Markets and Technological Innovation and Lower Costs. Key definitions, formulas, and exam tips.
  • Green Bond Indices and Climate-Aligned Debt Markets
    Green Bond Indices and Climate-Aligned Debt Markets (CFA Level 1): Defining Green Bonds and the Climate-Aligned Debt Universe, Certification Frameworks and Market Standards, and Anatomy of a Green Bond Index. Key definitions, formulas, and exam tips.
  • Historical Perspectives on Major Bond Market Disruptions
    Historical Perspectives on Major Bond Market Disruptions (CFA Level 1): Key Historical Bond Market Disruptions, Latin American Debt Crisis (1980s), and Russian Default (1998). Key definitions, formulas, and exam tips.
  • Big Data and Algorithmic Trading in Fixed-Income Markets
    Big Data and Algorithmic Trading in Fixed-Income Markets (CFA Level 1): Role of Large Datasets in Fixed-Income, Algorithmic Trading Strategies, and Real-Time Arbitrage and Supply-Demand Imbalances. Key definitions, formulas, and exam tips.
  • Bond ETFs and Their Impact on Market Liquidity
    Bond ETFs and Their Impact on Market Liquidity (CFA Level 1): Basics of Bond ETFs, Why Does This Matter for Liquidity?, and Creation/Redemption Mechanism. Key definitions, formulas, and exam tips.
  • Global Clearing and Settlement Systems for Fixed Income
    Global Clearing and Settlement Systems for Fixed Income (CFA Level 1): Why Clearing and Settlement Matter, Key Entities: Local vs. International CSDs, and Comparison Table: Local CSD vs. International CSD. Key definitions, formulas, and exam tips.
• Chapter 2: Key Features of Fixed-Income Securities
  Chapter 2: Key Features of Fixed-Income Securities (CFA Level 1): Practical explanations of core ideas, with key terms, formulas, and common exam pitfalls.
  • Bond Indentures and Covenants (Affirmative vs. Negative)
    Bond Indentures and Covenants (Affirmative vs. Negative) (CFA Level 1): Purpose of Bond Indentures, Key Parties and Document Flow, and Affirmative Covenants. Key definitions, formulas, and exam tips.
  • Principal Amount, Coupon Structure, and Maturity
    Principal Amount, Coupon Structure, and Maturity (CFA Level 1): Concept of Principal Amount, Types of Coupon Structures, and Fixed-Rate Coupons. Key definitions, formulas, and exam tips.
  • Embedded Options and Contingency Provisions
    Embedded Options and Contingency Provisions (CFA Level 1): Types of Embedded Options, Call Options, and Put Options. Key definitions, formulas, and exam tips.
  • Legal, Regulatory, and Tax Considerations
    Legal, Regulatory, and Tax Considerations (CFA Level 1): Legal Environment, Legal Framework and Contract Enforceability, and Hierarchy of Claims and Bankruptcy. Key definitions, formulas, and exam tips.
  • Bonds with ESG Features (Green, Social, and Sustainability-Linked)
    Bonds with ESG Features (Green, Social, and Sustainability-Linked) (CFA Level 1): Key Concepts & Definitions, Green Bonds, and Social Bonds. Key definitions, formulas, and exam tips.
  • Sukuk and Other Sharia-Compliant Structures
    Sukuk and Other Sharia-Compliant Structures (CFA Level 1): Essence of Sharia Compliance, Common Sukuk Structures, and Other Sharia-Compliant Arrangements. Key definitions, formulas, and exam tips.
  • Stripped Securities and Zero-Coupon Bonds
    Stripped Securities and Zero-Coupon Bonds (CFA Level 1): Stripped Securities: Concept and Characteristics, Transforming a Bond into Strips, and Zero-Coupon Bonds: A Deep Dive. Key definitions, formulas, and exam tips.
  • Variable-Rate and Perpetual Bonds
    Variable-Rate and Perpetual Bonds (CFA Level 1): Variable-Rate (Floating-Rate) Bonds, Key Characteristics, and Reference Rates and Spread. Key definitions, formulas, and exam tips.
  • Dual-Currency and Multicurrency Bond Structures
    Dual-Currency and Multicurrency Bond Structures (CFA Level 1): Dual-Currency Bonds, Why Dual-Currency?, and Diagram of a Dual-Currency Bond. Key definitions, formulas, and exam tips.
  • Panda, Samurai, Masala, and Other Local Currency Bond Types
    Panda, Samurai, Masala, and Other Local Currency Bond Types (CFA Level 1): Why Local Currency Matters, Key Features of Local Currency Bond Types, and Panda Bonds. Key definitions, formulas, and exam tips.
  • Payment-in-Kind (PIK) and Toggle Bonds
    Payment-in-Kind (PIK) and Toggle Bonds (CFA Level 1): Defining Payment-in-Kind Bonds, Key Characteristics, and Quick Anecdote. Key definitions, formulas, and exam tips.
  • Negative Coupon Bonds and Zero-Floor Provisions
    Negative Coupon Bonds and Zero-Floor Provisions (CFA Level 1): Drivers Behind Negative Coupon Structures, Mechanics of a Negative Coupon, and Zero-Floor Provisions. Key definitions, formulas, and exam tips.
  • IFRS vs. US GAAP for Bond Classifications and Disclosures
    IFRS vs. US GAAP for Bond Classifications and Disclosures (CFA Level 1): Key Concepts in Classification, Amortized Cost, and Fair Value Through Other Comprehensive Income (FVOCI). Key definitions, formulas, and exam tips.
  • Real-World ESG Bond Issuances and Regulatory Frameworks
    Real-World ESG Bond Issuances and Regulatory Frameworks (CFA Level 1): Rise of ESG Bonds, Key Regulatory Frameworks, and Sustainable Finance Disclosure Regulation (SFDR). Key definitions, formulas, and exam tips.
  • The Role of Guarantors and Bond Insurance in Security Features
    The Role of Guarantors and Bond Insurance in Security Features (CFA Level 1): Understanding Bond Insurance and Key Concepts. Key definitions, formulas, and exam tips.
  • Greenwashing Risks and Mitigation in ESG Bond Markets
    Greenwashing Risks and Mitigation in ESG Bond Markets (CFA Level 1): Defining Greenwashing, Why Does Greenwashing Arise?, and Major Risks to Investors. Key definitions, formulas, and exam tips.
• Chapter 3: Issuance, Trading, and Funding
  Chapter 3: Issuance, Trading, and Funding (CFA Level 1): Key concepts, definitions, and exam tips with practical examples. Use it to reinforce intuition and avoid common pitfalls.
  • Primary Markets, Underwriting, and Offerings
    Primary Markets, Underwriting, and Offerings (CFA Level 1): Underwriting Process, Firm Commitment vs. Best Efforts, and Role of the Syndicate. Key definitions, formulas, and exam tips.
  • Secondary Market Structures and Pricing Conventions
    Secondary Market Structures and Pricing Conventions (CFA Level 1): Over-the-Counter (OTC) Bond Trading, OTC Market Characteristics, and Exchange-Traded Bond Markets. Key definitions, formulas, and exam tips.
  • Short-Term Funding (Commercial Paper, Repos)
    Short-Term Funding (Commercial Paper, Repos) (CFA Level 1): Commercial Paper: Key Concepts, Definition and Purpose, and Issuance and Mechanics. Key definitions, formulas, and exam tips.
  • Global Bond Market Segmentation
    Global Bond Market Segmentation (CFA Level 1): What Does “Global Bond Market Segmentation” Actually Mean?, Key Segments: Domestic, Foreign, and Eurobond, and Domestic Market. Key definitions, formulas, and exam tips.
  • Innovations in Bond Issuance (Digital, Tokenized)
    Innovations in Bond Issuance (Digital, Tokenized) (CFA Level 1): Digital Bond Issuance, How Digital Bond Issuance Works, and Tokenized Bonds. Key definitions, formulas, and exam tips.
  • Auction Mechanisms and Syndication in Bond Issuance
    Auction Mechanisms and Syndication in Bond Issuance (CFA Level 1): Auction Mechanisms in Bond Issuance, Dutch Auction (Single-Price Auction), and Multiple-Price Auction. Key definitions, formulas, and exam tips.
  • Market Microstructure and Transaction Costs
    Market Microstructure and Transaction Costs (CFA Level 1): Understanding Market Microstructure in Fixed Income, Key Components of Fixed-Income Market Microstructure, and Dealers and Brokered Markets. Key definitions, formulas, and exam tips.
  • Cross-Border Listing and Localization of Funding
    Cross-Border Listing and Localization of Funding (CFA Level 1): Why Cross-Border Listing?, Localization of Funding: The Next Step, and Key Regulatory and Disclosure Requirements. Key definitions, formulas, and exam tips.
  • Private Placements and Rule 144A Market
    Private Placements and Rule 144A Market (CFA Level 1): Nature of Private Placements, Key Terms, and Why Companies Choose Private Placements. Key definitions, formulas, and exam tips.
  • Crowd-Based Bond Issuance and Direct Market Access
    Crowd-Based Bond Issuance and Direct Market Access (CFA Level 1): Defining Crowd-Based Bond Issuance, How It Works, and Rationale and Value Proposition. Key definitions, formulas, and exam tips.
  • Tri-Party Repos and Collateral Management
    Tri-Party Repos and Collateral Management (CFA Level 1): Essence of Tri-Party Repos, Key Roles, and Why Use Tri-Party Repos?. Key definitions, formulas, and exam tips.
  • Developments in Short-Term Instrument Financing Alternatives
    Developments in Short-Term Instrument Financing Alternatives (CFA Level 1): Traditional Short-Term Instruments: A Quick Recap, Asset-Backed Commercial Paper (ABCP), and Rationale for ABCP. Key definitions, formulas, and exam tips.
  • Electronic Platforms and AI-Driven Bond Issuance
    Electronic Platforms and AI-Driven Bond Issuance (CFA Level 1): Evolution of Electronic Bond Platforms, How Electronic Bond Platforms Work, and AI-Driven Bond Issuance: The Next Frontier. Key definitions, formulas, and exam tips.
  • Developments in High-Frequency Bond Trading
    Developments in High-Frequency Bond Trading (CFA Level 1): Understanding HFT in Bond Markets, Technology Infrastructure and Co-location, and Liquidity Fragmentation Across Bond Markets. Key definitions, formulas, and exam tips.
  • Intraday Liquidity and Netting in Bond Settlement Systems
    Intraday Liquidity and Netting in Bond Settlement Systems (CFA Level 1): Why Intraday Liquidity Matters, Settlement Risk: A Quick Refresher, and Netting and its Impact on Liquidity. Key definitions, formulas, and exam tips.
  • Short Selling and Repo Market Implications in Fixed Income
    Short Selling and Repo Market Implications in Fixed Income (CFA Level 1): Mechanics of Short Selling in Fixed Income, Step-by-Step Mechanics, and Motivations for Short Selling Bonds. Key definitions, formulas, and exam tips.
• Chapter 4: Government and Agency Debt
  Chapter 4: Government and Agency Debt (CFA Level 1): Key concepts, definitions, and exam tips with practical examples. Use it to reinforce intuition and avoid common pitfalls.
  • Sovereign (National) Debt Instruments
    Sovereign (National) Debt Instruments (CFA Level 1): Why Governments Issue Sovereign Debt, Key Characteristics and Market Role, and Credit Quality and Risk Factors. Key definitions, formulas, and exam tips.
  • Non-Sovereign and Quasi-Government Bonds
    Non-Sovereign and Quasi-Government Bonds (CFA Level 1): Key Attributes of Non-Sovereign Bonds, Quasi-Government Bonds and Their Distinctive Features, and Structural Variations. Key definitions, formulas, and exam tips.
  • Supranational and Agency Debt
    Supranational and Agency Debt (CFA Level 1): Understanding Supranational Institutions, Key Characteristics of Supranational Debt, and Practical Benefits and Risks of Supranational Bonds. Key definitions, formulas, and exam tips.
  • Risk Considerations for Government Issuers
    Risk Considerations for Government Issuers (CFA Level 1): Key Government Risks, Credit Risk, and Interest Rate Risk. Key definitions, formulas, and exam tips.
  • Inflation-Linked Bonds (TIPS and Linkers)
    Inflation-Linked Bonds (TIPS and Linkers) (CFA Level 1): Defining Inflation-Linked Bonds and How TIPS Work (U.S. Treasury Inflation-Protected Securities). Key definitions, formulas, and exam tips.
  • Central Bank Operations and Influence on Government Debt Markets
    Central Bank Operations and Influence on Government Debt Markets (CFA Level 1): Central Bank Policy Tools, Coordinating Government Debt Issuance, and Influence of Monetary Policy on Sovereign Yields. Key definitions, formulas, and exam tips.
  • Debt Buybacks and Liability Management
    Debt Buybacks and Liability Management (CFA Level 1): Reasons for Debt Buybacks, Liability Management Strategies Beyond Buybacks, and Switch (Exchange) Offers. Key definitions, formulas, and exam tips.
  • Budget Decisions and the Sovereign Debt Cycle
    Budget Decisions and the Sovereign Debt Cycle (CFA Level 1): Deficits and Surpluses, Understanding the Sovereign Debt Cycle, and Debt Issuance. Key definitions, formulas, and exam tips.
  • Sovereign Debt Crises and Restructuring
    Sovereign Debt Crises and Restructuring (CFA Level 1): Major Causes of Sovereign Debt Crises, Early Signs and Market Indicators, and Restructuring Tools and Mechanics. Key definitions, formulas, and exam tips.
  • Infrastructure Debt Financing Through Government-Sponsored Entities
    Infrastructure Debt Financing Through Government-Sponsored Entities (CFA Level 1): Role of GSEs in Infrastructure Financing and Key Features of GSE-Sponsored Infrastructure Debt. Key definitions, formulas, and exam tips.
  • Government Contingent Liabilities and Off-Balance-Sheet Obligations
    Government Contingent Liabilities and Off-Balance-Sheet Obligations (CFA Level 1): Understanding Government Contingent Liabilities, Idea of a Fiscal Risk Statement, and Off-Balance-Sheet Obligations. Key definitions, formulas, and exam tips.
  • Policy Coordination During Macroeconomic Stress Events
    Policy Coordination During Macroeconomic Stress Events (CFA Level 1): Key Players in the Coordination Process, Coordinated Strategies During Crises, and Why Policy Coordination Matters for Bond Markets. Key definitions, formulas, and exam tips.
  • Inflation Targeting and Constraints on Government Debt Issuance
    Inflation Targeting and Constraints on Government Debt Issuance (CFA Level 1): Understanding the Policy Goals of Inflation Targeting, Monetary-Fiscal Coordination, and Why Coordination Matters. Key definitions, formulas, and exam tips.
  • Green Gilt Issuance and Climate-Focused Government Debt
    Green Gilt Issuance and Climate-Focused Government Debt (CFA Level 1): Key Concepts and Definitions, Role of Green Gilts in Government Debt, and Issuance Process and Structural Features. Key definitions, formulas, and exam tips.
  • Debt Sustainability Analysis and IMF/World Bank Lending Frameworks
    Debt Sustainability Analysis and IMF/World Bank Lending Frameworks (CFA Level 1): Why DSAs Matter, Key Concepts in Debt Sustainability Analysis, and Defining Debt Sustainability. Key definitions, formulas, and exam tips.
  • Central Bank Digital Currencies and Government Debt Markets
    Central Bank Digital Currencies and Government Debt Markets (CFA Level 1): Potential Impact on Government Debt Issuance, Market Liquidity and Payment Settlement, and Implementation Considerations. Key definitions, formulas, and exam tips.
• Chapter 5: Corporate Debt Markets
  Chapter 5: Corporate Debt Markets (CFA Level 1): Key concepts, definitions, and exam tips with practical examples. Use it to reinforce intuition and avoid common pitfalls.
  • Investment-Grade vs. High-Yield Bonds
    Investment-Grade vs. High-Yield Bonds (CFA Level 1): Defining Investment-Grade and High-Yield, Credit Ratings and Classification, and Market Behavior and Liquidity. Key definitions, formulas, and exam tips.
  • Secured vs. Unsecured Structures
    Secured vs. Unsecured Structures (CFA Level 1): Context within Corporate Debt Markets, Collateral Basics: Why It Matters, and Understanding Secured Debt. Key definitions, formulas, and exam tips.
  • Credit Enhancements and Covenants
    Credit Enhancements and Covenants (CFA Level 1): Why Credit Enhancements Matter, How Enhancements Affect Bond Pricing and Yields, and Common Types of Credit Enhancements. Key definitions, formulas, and exam tips.
  • Rating Agency Perspectives and Market Dynamics
    Rating Agency Perspectives and Market Dynamics (CFA Level 1): Role of Rating Agencies in Corporate Debt, Rating Process, and Lagging Indicators vs. Market Sentiment. Key definitions, formulas, and exam tips.
  • Hybrid Corporate Debt (Convertible, Subordinated, and Tiered Instruments)
    Hybrid Corporate Debt (Convertible, Subordinated, and Tiered Instruments) (CFA Level 1): Key Features of Hybrid Debt and Convertible Bonds: Bond with an Equity Kicker. Key definitions, formulas, and exam tips.
  • Financial vs. Non-Financial Corporate Issuance
    Financial vs. Non-Financial Corporate Issuance (CFA Level 1): Structural Distinctions, Regulatory Compliance and Capital Adequacy, and Credit Analysis Perspectives. Key definitions, formulas, and exam tips.
  • Bankruptcy Processes and Debt Restructuring
    Bankruptcy Processes and Debt Restructuring (CFA Level 1): Bankruptcy Frameworks around the World, Reorganization vs. Liquidation, and Reorganization. Key definitions, formulas, and exam tips.
  • Corporate Bond Issuance Lifecycles and Prospect Analysis
    Corporate Bond Issuance Lifecycles and Prospect Analysis (CFA Level 1): Preliminary Considerations: Assessing the Need and Timing, Underwriting and Structuring the Deal, and Offering Memorandum vs. Prospectus. Clear examples and common exam pitfalls.
  • Shelf Registration and Medium-Term Notes (MTN) Programs
    Shelf Registration and Medium-Term Notes (MTN) Programs (CFA Level 1): Rationale for Shelf Registration, Why Shelf Registration Takes Center Stage, and Key Benefits. Key definitions, formulas, and exam tips.
  • Changes in Corporate Bond Market Microstructure Post-Crisis
    Changes in Corporate Bond Market Microstructure Post-Crisis (CFA Level 1): Impact of Post-Crisis Regulatory Reforms and Electronification and the Bucking of Old Traditions. Key definitions, formulas, and exam tips.
  • Corporate Governance Reforms and Debt Market Implications
    Corporate Governance Reforms and Debt Market Implications (CFA Level 1): Why Corporate Governance Matters for Bondholders and Key Governance Reforms and Their Relevance to Debt. Key definitions, formulas, and exam tips.
  • Covenants in Leveraged Loan and High-Yield Bond Markets
    Covenants in Leveraged Loan and High-Yield Bond Markets (CFA Level 1): Distinguishing Leveraged Loans and High-Yield Bonds, Covenant Types: Maintenance vs. Incurrence, and Maintenance Covenants. Key definitions, formulas, and exam tips.
  • Private Debt Markets and Direct Lending
    Private Debt Markets and Direct Lending (CFA Level 1): Nature of Private Debt vs Public Debt, Key Structures in Direct Lending, and Unitranche Loans. Key definitions, formulas, and exam tips.
  • Trends in ESG Ratings and Corporate Bond Implications
    Trends in ESG Ratings and Corporate Bond Implications (CFA Level 1): Why ESG Ratings Matter in Corporate Debt Markets, Complementing Traditional Credit Analysis, and Relationship with Default Risk and Spread. Key definitions, formulas, and exam tips.
  • Corporate Liability Management Exercises (Exchange Offers, Consent Solicitations)
    Corporate Liability Management Exercises (Exchange Offers, Consent Solicitations) (CFA Level 1): Definition and Rationale, Exchange Offers, and Motivations for Exchange Offers. Key definitions, formulas, and exam tips.
  • The Role of Private Equity in Leveraged Finance
    The Role of Private Equity in Leveraged Finance (CFA Level 1): Defining Leveraged Finance in the Context of Private, LBO Fundamentals, and Capital Structures in LBO Deals. Key definitions, formulas, and exam tips.
• Chapter 6: Bond Pricing and Valuation Basics
  Chapter 6: Bond Pricing and Valuation Basics (CFA Level 1): Key concepts, definitions, and exam tips with practical examples. Use it to reinforce intuition and avoid common pitfalls.
  • Present Value Concepts and Calculation Methods
    Present Value Concepts and Calculation Methods (CFA Level 1): Time Value of Money in Bond Valuation, Key Present Value Building Blocks, and Different Compounding Conventions. Key definitions, formulas, and exam tips.
  • Yield-to-Maturity and Other Yield Measures
    Yield-to-Maturity and Other Yield Measures (CFA Level 1): Yield-to-Maturity: The Backbone of Bond Valuation, Formula and Cash Flow Representation, and Assumptions and Usage. Key definitions, formulas, and exam tips.
  • Accrued Interest, Full Price, and Clean Price
    Accrued Interest, Full Price, and Clean Price (CFA Level 1): Clean Price vs. Full Price (Dirty Price), Accrued Interest and Day-Count Conventions, and General Formula for Accrued Interest. Key definitions, formulas, and exam tips.
  • Matrix Pricing and Comparable Bond Analysis
    Matrix Pricing and Comparable Bond Analysis (CFA Level 1): Key Reasons to Use Matrix Pricing, Comparable Bond Analysis, and Selecting Comparable Bonds. Key definitions, formulas, and exam tips.
  • Floating-Rate Instruments and Money Market Yields
    Floating-Rate Instruments and Money Market Yields (CFA Level 1): Setting the Stage: The Nature of Floating-Rate Instruments, Key Features of FRNs, and LIBOR to SOFR Transition. Key definitions, formulas, and exam tips.
  • Valuation of Bonds with Irregular Coupon Periods
    Valuation of Bonds with Irregular Coupon Periods (CFA Level 1): Understanding Irregular Coupon Periods, Key Reasons for Irregular Coupons, and Day Count Conventions and Accrued Interest. Key definitions, formulas, and exam tips.
  • Bond Valuation Using Yield Curve Models
    Bond Valuation Using Yield Curve Models (CFA Level 1): Why Use Spot and Forward Rates Instead of, Bootstrapping and Constructing Spot Rate Curves, and Forward Rates and Their Role. Key definitions, formulas, and exam tips.
  • Calculating Yields for Index-Amortizing Bonds
    Calculating Yields for Index-Amortizing Bonds (CFA Level 1): Key Concepts of Index-Amortizing Bonds, Payment Mechanics and Scenario Analysis, and Visual Representation of IAB Cash Flows. Key definitions, formulas, and exam tips.
  • Sensitivity Analysis for Bond Cash Flows
    Sensitivity Analysis for Bond Cash Flows (CFA Level 1): Understanding Sensitivity Analysis, Scenario Analysis vs. Stress Testing, and Measuring Price Sensitivity. Key definitions, formulas, and exam tips.
  • Sinking Fund Provisions: Pricing and Credit Considerations
    Sinking Fund Provisions: Pricing and Credit Considerations (CFA Level 1): Understanding Sinking Fund Provisions, Sinking Fund Structures and Types, and How Sinking Funds Affect Default Risk. Key definitions, formulas, and exam tips.
  • Bond Valuation in a Multi-Curve Environment
    Bond Valuation in a Multi-Curve Environment (CFA Level 1): Foundations of Multi-Curve Pricing, Why More than One Curve?, and OIS Discounting vs. Traditional LIBOR Curves. Key definitions, formulas, and exam tips.
  • Weighted Average Life (WAL) Calculations
    Weighted Average Life (WAL) Calculations (CFA Level 1): Why Weighted Average Life Matters, Concept Behind WAL, and WAL vs. Maturity. Key definitions, formulas, and exam tips.
  • Bond Accounting under IFRS vs. US GAAP: Premium and Discount Amortization
    Bond Accounting under IFRS vs. US GAAP: Premium and Discount Amortization (CFA Level 1): Effective Interest Rate Method, IFRS vs. US GAAP Classifications, and IFRS Classification. Key definitions, formulas, and exam tips.
  • Monte Carlo Simulation in Bond Pricing
    Monte Carlo Simulation in Bond Pricing (CFA Level 1): Why Use Monte Carlo for Bond Pricing?, Foundations of Monte Carlo Simulation, and Step-by-Step Monte Carlo Approach for Bond Pricing. Key definitions, formulas, and exam tips.
  • Cross-Currency Swaps and Implications for Bond Valuation
    Cross-Currency Swaps and Implications for Bond Valuation (CFA Level 1): Basic Mechanics of Cross-Currency Swaps, Role in Hedging Foreign Exchange Risk, and Impact on Bond Valuation. Key definitions, formulas, and exam tips.
  • Day Count Conventions and Their Effects on Accrued Interest
    Day Count Conventions and Their Effects on Accrued Interest (CFA Level 1): Core Concepts of Day Count Conventions, 30/360 (Bond Basis), and Actual/365 (Fixed). Key definitions, formulas, and exam tips.
• Chapter 7: The Term Structure of Interest Rates
  Chapter 7: The Term Structure of Interest Rates (CFA Level 1): Practical explanations of core ideas, with key terms, formulas, and common exam pitfalls.
  • Spot Rates, Par Rates, and Forward Rates
    Spot Rates, Par Rates, and Forward Rates (CFA Level 1): Spot Rates, Bootstrapping and the Spot Rate Curve, and Par Rates. Key definitions, formulas, and exam tips.
  • Constructing Yield Curves (Treasury, Benchmark)
    Constructing Yield Curves (Treasury, Benchmark) (CFA Level 1): Treasury Yield Curves as Benchmarks, Data Collection for Curve Construction, and Bootstrapping Zero-Coupon Spot Rates. Key definitions, formulas, and exam tips.
  • Theories Explaining the Yield Curve (Pure Expectations, Liquidity, etc.)
    Theories Explaining the Yield Curve (Pure Expectations, Liquidity, etc.) (CFA Level 1): Pure (Unbiased) Expectations Theory, Mathematical Representation, and Strengths and Weaknesses. Key definitions, formulas, and exam tips.
  • Applications of the Term Structure in Valuation
    Applications of the Term Structure in Valuation (CFA Level 1): Using the Term Structure for Bond Valuation, Arbitrage-Free Valuation, and Bond Valuation Process (Illustrated). Key definitions, formulas, and exam tips.
  • Yield Curve Shapes and Movements (Flattening, Steepening, Butterfly)
    Yield Curve Shapes and Movements (Flattening, Steepening, Butterfly) (CFA Level 1): Common Yield Curve Shapes, Normal (Upward Sloping), and Flat. Key definitions, formulas, and exam tips.
  • Forward Curve Strategies and Hedging Interest Rate Exposure
    Forward Curve Strategies and Hedging Interest Rate Exposure (CFA Level 1): Understanding Forward Rates, Market Expectations, and Terminal Value Projection. Key definitions, formulas, and exam tips.
  • Dynamics of the Real Yield Curve
    Dynamics of the Real Yield Curve (CFA Level 1): What Is the Real Yield Curve?, Constructing a Real Yield Curve, and Data Gathering. Key definitions, formulas, and exam tips.
  • Negative Yield Curves and Macro Implications
    Negative Yield Curves and Macro Implications (CFA Level 1): Understanding Negative Yields, Negative Yield Curves in a Macro Context, and Diagram: Simplified Negative Yield Curve. Key definitions, formulas, and exam tips.
  • Curvature and Butterfly Strategies
    Curvature and Butterfly Strategies (CFA Level 1): Understanding Curvature, Butterfly Strategy, and Quick Analogy. Key definitions, formulas, and exam tips.
  • Multi-Curve Frameworks for LIBOR Replacements
    Multi-Curve Frameworks for LIBOR Replacements (CFA Level 1): Background and Motivation, Evolution from Single-Curve to Multi-Curve Approach, and Components of the Multi-Curve Framework. Key definitions, formulas, and exam tips.
  • Short Rate Models (Vasicek, CIR) in Term Structure Analysis
    Short Rate Models (Vasicek, CIR) in Term Structure Analysis (CFA Level 1): Vasicek Short Rate Model, Key Characteristics, and Analytical Bond Pricing. Key definitions, formulas, and exam tips.
  • Segmented Markets Theory and Investor Clienteles
    Segmented Markets Theory and Investor Clienteles (CFA Level 1): Core Concepts of Segmented Markets Theory, Drivers of Market Segmentation, and Preferred Habitat Theory. Key definitions, formulas, and exam tips.
  • Empirical Evidence on Yield Curve Inversions and Economic Predictions
    Empirical Evidence on Yield Curve Inversions and Economic Predictions (CFA Level 1): Historical Patterns of Inversions and Recessions, Why the Correlation?, and Tools for Analysis. Key definitions, formulas, and exam tips.
  • Analysis of Yield Curve Shifts Using Principal Components
    Analysis of Yield Curve Shifts Using Principal Components (CFA Level 1): Building Blocks of PCA in Bond Markets, Why Data Matters in PCA, and Implementation Steps. Key definitions, formulas, and exam tips.
  • Macro-Finance Models and No-Arbitrage Approaches to Yield Curves
    Macro-Finance Models and No-Arbitrage Approaches to Yield Curves (CFA Level 1): Macro-Finance Models, Integrating Macroeconomic Variables, and Structural Interpretation. Key definitions, formulas, and exam tips.
  • Nelson-Siegel and Svensson Approaches to Yield Curve Estimation
    Nelson-Siegel and Svensson Approaches to Yield Curve Estimation (CFA Level 1): Nelson-Siegel Model Foundations, Conceptual Understanding of the Three Factors, and Nelson-Siegel Functional Form. Key definitions, formulas, and exam tips.
• Chapter 8: Interest Rate Risk and Return Analysis
  Chapter 8: Interest Rate Risk and Return Analysis (CFA Level 1): Practical explanations of core ideas, with key terms, formulas, and common exam pitfalls.
  • Sources of Bond Return and Reinvestment Risk
    Sources of Bond Return and Reinvestment Risk (CFA Level 1): Breaking Down the Sources of Bond Return, Coupon Income, and Reinvestment of Coupon Income. Key definitions, formulas, and exam tips.
  • Duration Measures (Macaulay, Modified, Effective)
    Duration Measures (Macaulay, Modified, Effective) (CFA Level 1): Macaulay Duration, Conceptual Underpinnings, and Formula and Calculation. Key definitions, formulas, and exam tips.
  • Convexity and Price Sensitivity Estimates
    Convexity and Price Sensitivity Estimates (CFA Level 1): Revisiting Duration vs Convexity, Positive Convexity, and Negative Convexity. Key definitions, formulas, and exam tips.
  • Key Rate Duration and Empirical Duration
    Key Rate Duration and Empirical Duration (CFA Level 1): Understanding Key Rate Duration, Why Conventional Duration Isn’t Always Enough, and Mechanics of Key Rate Duration. Key definitions, formulas, and exam tips.
  • Option-Adjusted Spread (OAS) and Bonds with Embedded Options
    Option-Adjusted Spread (OAS) and Bonds with Embedded Options (CFA Level 1): Understanding the Basics of OAS, Why OAS Matters for Bonds with Embedded Options, and Decomposing the Elements of a Bond’s Yield. Key definitions, formulas, and exam tips.
  • Interest Rate Risk Management Strategies
    Interest Rate Risk Management Strategies (CFA Level 1): Understanding the Nature of Interest Rate Risk, Defensive vs. Opportunistic Approaches, and Duration Matching and Immunization. Key definitions, formulas, and exam tips.
  • Negative Interest Rate Environment: Implications and Risk
    Negative Interest Rate Environment: Implications and Risk (CFA Level 1): Context and Background, How Negative Rates Happen, and Mechanics of Bond Valuation Under Negative Rates. Key definitions, formulas, and exam tips.
  • Scenario Analysis and Stress Testing for Rate Risk
    Scenario Analysis and Stress Testing for Rate Risk (CFA Level 1): Understanding Scenario Analysis, Mechanics of a Scenario Analysis, and Stress Testing as an Extension of Scenario Analysis. Key definitions, formulas, and exam tips.
  • Risk-Neutral Valuation and Rates Modeling
    Risk-Neutral Valuation and Rates Modeling (CFA Level 1): Key Concepts in Risk-Neutral Valuation, Risk-Neutral World, and Arbitrage-Free Pricing. Key definitions, formulas, and exam tips.
  • Leverage Impact on Bond Portfolio Risk
    Leverage Impact on Bond Portfolio Risk (CFA Level 1): Basic Concepts of Leverage in Bond Portfolios, Duration Amplification, and Common Forms of Leverage. Key definitions, formulas, and exam tips.
  • Fixed-Income Performance Attribution and Risk Decomposition
    Fixed-Income Performance Attribution and Risk Decomposition (CFA Level 1): Performance Attribution: Foundations, Building Blocks of Attribution, and Top-Down vs. Bottom-Up. Key definitions, formulas, and exam tips.
  • Portfolio Style Analysis and Factor-Based Return Drivers
    Portfolio Style Analysis and Factor-Based Return Drivers (CFA Level 1): Understanding Style Analysis in Fixed Income, Key Purposes of Style Analysis, and Common Fixed-Income Styles. Key definitions, formulas, and exam tips.
  • Advanced Hedging Strategies Using Interest Rate Derivatives
    Advanced Hedging Strategies Using Interest Rate Derivatives (CFA Level 1): Role of Advanced Interest Rate Derivative Strategies, Key Instruments for Hedging Interest Rate Risk, and Interest Rate Futures. Key definitions, formulas, and exam tips.
  • Performance Measures for Fixed-Income Hedge Funds
    Performance Measures for Fixed-Income Hedge Funds (CFA Level 1): Foundations of Fixed-Income Hedge Fund Strategies, Common Performance Measures, and Annualized Return and Volatility. Key definitions, formulas, and exam tips.
  • Liability-Driven Investing (LDI) and Immunization Strategies
    Liability-Driven Investing (LDI) and Immunization Strategies (CFA Level 1): Liability-Driven Investing (LDI), Surplus Volatility, and Practical Note for Pension Funds. Key definitions, formulas, and exam tips.
  • Spread Risk and Basis Risk in Fixed-Income Portfolios
    Spread Risk and Basis Risk in Fixed-Income Portfolios (CFA Level 1): Understanding Spread Risk, Measuring Spread Risk, and Understanding Basis Risk. Key definitions, formulas, and exam tips.
• Chapter 9: Credit Risk and Credit Analysis
  Chapter 9: Credit Risk and Credit Analysis (CFA Level 1): Key concepts, definitions, and exam tips with practical examples. Use it to reinforce intuition and avoid common pitfalls.
  • Components of Credit Risk (Default Probability, Loss Given Default)
    Components of Credit Risk (Default Probability, Loss Given Default) (CFA Level 1): Understanding Default Probability (PD), Understanding Loss Given Default (LGD), and Fluctuations in LGD. Key definitions, formulas, and exam tips.
  • Yield Spreads and Determinants of Credit Spreads
    Yield Spreads and Determinants of Credit Spreads (CFA Level 1): Which of the following best describes a “yield, Which factor often leads to a higher credit, and widening credit spread usually indicates. Key definitions, formulas, and exam tips.
  • Credit Ratings: Agency Methods and Limitations
    Credit Ratings: Agency Methods and Limitations (CFA Level 1): How Credit Rating Agencies Operate, Agency Structures and the Issuer-Pays Model, and Qualitative vs. Quantitative Approaches. Key definitions, formulas, and exam tips.
  • Corporate, Municipal, and Sovereign Credit Analysis
    Corporate, Municipal, and Sovereign Credit Analysis (CFA Level 1): Corporate Credit Analysis, Key Financial Metrics, and Qualitative Factors. Key definitions, formulas, and exam tips.
  • Distressed Debt Analysis and Recovery Rates
    Distressed Debt Analysis and Recovery Rates (CFA Level 1): Nature of Distressed Debt, Capital Structure Hierarchy and Its Influence on Recovery, and Recovery Rates—Not Always Predictable. Key definitions, formulas, and exam tips.
  • Credit Migration and Transition Models
    Credit Migration and Transition Models (CFA Level 1): Nature of Credit Migration, Transition Matrices: A Roadmap for Potential Rating Paths, and Markov Chain Foundation. Key definitions, formulas, and exam tips.
  • ESG Integration into Credit Analysis
    ESG Integration into Credit Analysis (CFA Level 1): Influence of Environmental, Social, and Governance Factors, Why ESG Matters for Credit Risk, and Core Components of ESG Analysis. Key definitions, formulas, and exam tips.
  • Relationship Between Liquidity Risk and Credit Risk
    Relationship Between Liquidity Risk and Credit Risk (CFA Level 1): Defining Liquidity Risk and Credit Risk and When liquidity risk and credit risk feed on. Key definitions, formulas, and exam tips.
  • Systemic Credit Shocks and Contagion Effects
    Systemic Credit Shocks and Contagion Effects (CFA Level 1): Understanding Systemic Risk and Contagion, Interconnectedness of Financial Institutions, and Channels of Transmission. Key definitions, formulas, and exam tips.
  • Structural vs. Reduced-Form Credit Risk Models
    Structural vs. Reduced-Form Credit Risk Models (CFA Level 1): Structural Credit Risk Models, Merton Model Basics, and Default Interpretation. Key definitions, formulas, and exam tips.
  • Regulatory Capital Requirements and Impact on Credit Markets
    Regulatory Capital Requirements and Impact on Credit Markets (CFA Level 1): Basel Accords in a Nutshell, Tier 1 vs. Tier 2 Capital, and Risk-Weighted Assets and Sector Differentiation. Key definitions, formulas, and exam tips.
  • Real-World Examples of Recovery in Cross-Border Defaults
    Real-World Examples of Recovery in Cross-Border Defaults (CFA Level 1): Cross-Border Default: Key Considerations, Diagram: Cross-Border Default Process, and Sovereign Default Case Studies. Key definitions, formulas, and exam tips.
  • AI-Driven Credit Risk Modeling and Alternative Data Analysis
    AI-Driven Credit Risk Modeling and Alternative Data Analysis (CFA Level 1): Machine Learning Foundations for Credit Risk and Alternative Data: Expanding the Horizons. Key definitions, formulas, and exam tips.
  • Coordination Among Rating Agencies in Global Crises
    Coordination Among Rating Agencies in Global Crises (CFA Level 1): Historical Perspective on Rating Agency Coordination, Why Inconsistent Ratings Harm Markets, and Role of IOSCO in Encouraging Harmonization. Key definitions, formulas, and exam tips.
  • CVA, DVA, and Accounting for Derivative Credit Valuation Adjustments
    CVA, DVA, and Accounting for Derivative Credit Valuation Adjustments (CFA Level 1): Understanding CVA, Why CVA Matters, and Understanding DVA. Key definitions, formulas, and exam tips.
  • Global Regulatory Divergences in Credit Rating Usage
    Global Regulatory Divergences in Credit Rating Usage (CFA Level 1): Evolving Regulatory Landscape, Europe’s CRA Regulation, and US Regulatory Framework and the SEC. Key definitions, formulas, and exam tips.
• Chapter 10: Securitization and Structured Products
  Chapter 10: Securitization and Structured Products (CFA Level 1): Practical explanations of core ideas, with key terms, formulas, and common exam pitfalls.
  • Introduction to Securitization and Parties Involved
    Introduction to Securitization and Parties Involved (CFA Level 1): Key Concepts in Securitization, Typical Securitization Flow, and Parties Involved in a Securitization. Key definitions, formulas, and exam tips.
  • Mortgage-Backed Securities (Residential and Commercial)
    Mortgage-Backed Securities (Residential and Commercial) (CFA Level 1): Core Concepts of MBS, Securitization Process, and Key Differences Between RMBS and CMBS. Key definitions, formulas, and exam tips.
  • Asset-Backed Securities (Auto Loans, Credit Cards, etc.)
    Asset-Backed Securities (Auto Loans, Credit Cards, etc.) (CFA Level 1): Key ABS Collateral Types, Auto Loan ABS, and Credit Card ABS. Key definitions, formulas, and exam tips.
  • Collateralized Mortgage Obligations (CMOs) and Other Structured Vehicles
    Collateralized Mortgage Obligations (CMOs) and Other Structured Vehicles (CFA Level 1): Building Blocks of MBS and the Birth, Key CMO Structures and Tranches, and Sequential-Pay Tranches. Key definitions, formulas, and exam tips.
  • Covered Bonds and European Pfandbrief
    Covered Bonds and European Pfandbrief (CFA Level 1): Key Characteristics of Covered Bonds, European Pfandbrief: A Blueprint for Stability, and Covered Bonds vs. ABS. Key definitions, formulas, and exam tips.
  • Synthetic Securitizations and Credit Derivative Structures
    Synthetic Securitizations and Credit Derivative Structures (CFA Level 1): Key Concepts, Significance and Rationale, and How It Works: The Flow of Risk and. Key definitions, formulas, and exam tips.
  • Evaluating Risks in Structured Finance (Operational, Counterparty)
    Evaluating Risks in Structured Finance (Operational, Counterparty) (CFA Level 1): Linking the Dots in Structured Finance, Operational Risk: The Nuts and Bolts, and Key Sources of Operational Risk. Key definitions, formulas, and exam tips.
  • Impact of Regulatory Changes on Structured Product Innovation
    Impact of Regulatory Changes on Structured Product Innovation (CFA Level 1): Post-Crisis Regulatory Shift, Risk Retention: “Skin in the Game”, and Capital Requirements and Basel Accords. Key definitions, formulas, and exam tips.
  • Marketplace Lending Securitizations (Peer-to-Peer)
    Marketplace Lending Securitizations (Peer-to-Peer) (CFA Level 1): Defining the Marketplace Lending Model, Quick Look at the Securitization Structure, and Securitization Rationale and Benefits. Key definitions, formulas, and exam tips.
  • Re-Remics and Repackaging of Existing Structured Securities
    Re-Remics and Repackaging of Existing Structured Securities (CFA Level 1): Why Re-Remics?, Re-Remic Mechanics and Waterfall Restructuring, and Credit Subordination. Key definitions, formulas, and exam tips.
  • Insurance-Linked Securities and Catastrophe Bonds
    Insurance-Linked Securities and Catastrophe Bonds (CFA Level 1): Key Mechanics of Insurance-Linked Securities, Why Transfer Insurance Risk to Capital Markets?, and Catastrophe Bonds (Cat Bonds). Key definitions, formulas, and exam tips.
  • LIBOR Transition and Fallback Provisions for Structured Products
    LIBOR Transition and Fallback Provisions for Structured Products (CFA Level 1): Understanding the Phasing Out of LIBOR, Choosing New Benchmark Rates, and Key Elements of Fallback Provisions. Key definitions, formulas, and exam tips.
  • ESG Integration in Structured Credit and Green Securitizations
    ESG Integration in Structured Credit and Green Securitizations (CFA Level 1): Need for ESG Integration, Green Securitizations, and Light Green vs. Dark Green. Key definitions, formulas, and exam tips.
  • Evolving Securitization Structures with Blockchain Applications
    Evolving Securitization Structures with Blockchain Applications (CFA Level 1): Foundational Concepts of Blockchain in Securitization and Asset Tokenization in Securitized Products. Key definitions, formulas, and exam tips.
  • Collateralized Loan Obligations (CLOs) and Structuring Mechanics
    Collateralized Loan Obligations (CLOs) and Structuring Mechanics (CFA Level 1): CLO Fundamentals, CLO Structure, and Key CLO Participants. Key definitions, formulas, and exam tips.
  • Warehouse Lines and the Securitization Pipeline
    Warehouse Lines and the Securitization Pipeline (CFA Level 1): Understanding the Securitization Pipeline, Key Concepts of Warehouse Lines, and Pipeline Risk and Why It Matters. Key definitions, formulas, and exam tips.