An Introduction to Bond Markets [Paperback]

The bond markets are a vital part of the world economy. The fourth edition of Professor Moorad Choudhry's benchmark reference text An Introduction to Bond Markets brings readers up to date with latest developments and market practice, including the impact of the financial crisis and issues of relevance for investors. This book offers a detailed yet accessible look at bond instruments, and is aimed specifically at newcomers to the market or those unfamiliar with modern fixed income products. The author capitalises on his wealth of experience in the fixed income markets to present this concise yet in-depth coverage of bonds and associated derivatives.

Topics covered include:

• Bond pricing and yield
• Duration and convexity
• Eurobonds and convertible bonds
• Structured finance securities
• Interest-rate derivatives
• Credit derivatives
• Relative value trading

Related topics such as the money markets and principles of risk management are also introduced as necessary background for students and practitioners. The book is essential reading for all those who require an introduction to the financial markets.

Foreword xvii

Preface xix

Preface to the First Edition xxiii

About the author xxv

1 INTRODUCTION TO BONDS 1

Description 4

Outline of market participants 6

Bond analysis 8

Financial arithmetic: the time value of money 8

Present value and discounting 9

Discount factors and boot-strapping the discount function 15

Bond pricing and yield: the traditional approach 18

Bond pricing 18

Bond yield l³÷