Fixed Income Mathematics

Authors

Kenneth S. Bigel, Touro UniversityFollow

Files

Description

2025

Bond Math is at the center of the functioning of the bond markets, yet this critical sub-finance discipline is usually not accessible to the typical investor. This is an approachable study of the mathematical theories underlying Fixed Income instruments. It is not a study of bonds per se or the bond markets. The text commences with a basic review of the time value of money, i.e., the theory of compound interest. It then proceeds to discuss how bond prices and yields are determined. Next, it covers the relationships between bond prices and general movements of interest rates in the economy. Other topics include bond portfolio management, how an investor may cope with ever-changing interest rates, and “callable bonds.”

The author has intentionally simplified this otherwise abstruse topic so that it will be accessible to the average reader. Most readers will be comfortable with the basic ninth-grade mathematics involved. Each chapter smoothly transitions to the next; before moving on to the next chapter, the reader will sense a feeling of mastery and completion. Chapters are followed by review questions so that the student can gauge his/her mastery.

External Link

https://touro.pressbooks.pub/fixedincomemathematics/

Publication Date

6-9-2025

Publisher

Open Touro

City

New York

Keywords

Economics, Business, Finance, Bond Math

Disciplines

Business | Economics | Finance and Financial Management

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Recommended Citation

Bigel, K. S. (2025). Fixed Income Mathematics. Retrieved from https://touroscholar.touro.edu/opentextbooks/13