Learning Outcome Statements

1. Bond Prices and the Time Value of Money

a. calculate a bond's price given a market discount rate;

2. Relationships between Bond Price and Bond Characteristics

b. identify the relationships among a bond's price, coupon rate, maturity, and market discount rate (yield-to-maturity);

c. define spot rates and calculate the price of a bond using spot rates;

3. Flat Price, Accrued Interest, and the Full Price

d. describe and calculate the flat price, accrued interest, and the full price of a bond;

4. Matrix Pricing

e. describe matrix pricing;

5. Yield Measures for Fixed-Rate Bonds

f. calculate and interpret yield measures for fixed-rate bonds, floating-rate notes, and money market instruments;

6. Yield Measures for Floating-Rate Notes and Money Market Instruments

f. calculate and interpret yield measures for fixed-rate bonds, floating-rate notes, and money market instruments;

7. The Maturity Structure of Interest Rates

g. define and compare the spot curve, yield curve on coupon bonds, par curve, and forward curve;

h. define forward rates and calculate spot rates from forward rates, forward rates from spot rates, and the price of a bond using forward rates;

8. Yield Spreads

i. compare, calculate, and interpret yield spread measures.