Chapter 6: Fixed-Income Securities: Features and Types

In this section

• 6.1 The Fixed-Income Marketplace
  • 6.1.1 Overview of the Fixed-Income Market
    An in-depth exploration of the fixed-income marketplace, its significance, key participants, market size, and liquidity characteristics.
  • 6.1.2 Role of Fixed-Income Securities
    Exploration of the significance of fixed-income securities in providing regular income, preserving capital, and diversifying investment portfolios.
• 6.2 The Basic Features and Terminology of Fixed-Income Securities
  • 6.2.1 Bond Basics
    Understanding the foundational elements of bonds, including par value, coupon rates, maturity, yield to maturity, and the distinction between fixed-rate and floating-rate bonds.
  • 6.2.2 Interest Rate Sensitivity
    Explore the concept of interest rate sensitivity in fixed-income securities, focusing on duration, convexity, and their impact on bond prices and yields in the face of interest rate changes.
  • 6.2.3 Credit Risk and Ratings
    A comprehensive exploration of credit risk, credit ratings, and their implications on fixed-income securities, including distinctions between investment-grade and high-yield bonds.
• 6.3 Government of Canada Securities
  • 6.3.1 Treasury Bills
    In-depth analysis of Canadian Treasury Bills, including their characteristics, uses, and the auction process for issuance.
  • 6.3.2 Government Bonds
    An in-depth exploration of Canadian government bonds, focusing on Canada Savings Bonds and marketable government bonds as part of fixed-income securities
  • 6.3.3 Real Return Bonds (RRBs)
    Understanding Real Return Bonds (RRBs) issued by the Government of Canada, their inflation-protection features, pricing, and yield calculations.
• 6.4 Provincial and Municipal Government Securities
  • 6.4.1 Provincial Bonds
    An in-depth look into the purposes, features, and credit considerations of provincial bonds in Canada.
  • 6.4.2 Municipal Debentures
    An in-depth exploration of municipal debentures, including their types and the distinction between revenue and general obligation bonds within municipal securities.
• 6.5 Types of Corporate Bonds
  • 6.5.1 Senior and Subordinated Debt
    Understand the differences between senior and subordinated debt in terms of repayment hierarchy, risk, and return profiles.
  • 6.5.2 Callable and Convertible Bonds
    An exploration of callable and convertible bonds, their features, conditions, and impacts on both issuers and investors.
  • 6.5.3 Secured and Unsecured Bonds
    An in-depth exploration of secured (collateralized) and unsecured (debentures) corporate bonds, detailing their characteristics and role in the investment landscape.
• 6.6 Other Fixed-Income Securities
  • 6.6.1 Asset-Backed Securities (ABS)
    An in-depth exploration of Asset-Backed Securities, including their types, structures, and risk factors.
  • 6.6.2 Eurobonds
    Understanding Eurobonds, their global market impact, and differences from domestic bonds.
  • 6.6.3 Treasury Inflation-Protected Securities (TIPS)
    An in-depth exploration of Treasury Inflation-Protected Securities, focusing on their inflation adjustment mechanism and yield calculation.
• 6.7 How to Read Bond Quotes and Ratings
  • 6.7.1 Bond Quotation Systems
    An in-depth exploration of bond quotation systems, focusing on price and yield quotes, and pricing conventions.
  • 6.7.2 Interpreting Credit Ratings
    This section explores how investors can interpret credit ratings, detailing the rating scales used by credit agencies and understanding the implications of these ratings on investment decisions and bond pricing.
  • 6.7.3 Recognizing Market Trends
    An in-depth exploration of yield curves, spreads, and their implications for interpreting market trends and interest rate expectations in bond markets.