Starting from zero · Course 8 of 11 · Stage 2
Rates, bonds and the curve
Price a coupon bond, compute a yield and a duration by hand, read a real Treasury curve, and see why a filed interest rate is not a credit spread.
An equity investor meets bond arithmetic three times: reading a maturity wall in a debt note, reading a credit spread, and choosing a risk-free rate for a discount rate. All three are ordinarily done on intuition. This course does them with numbers.
Eight lessons. The first four build a price and the three yields that can be quoted on the same bond. The next two measure how a price moves when rates move, first with duration and then with the curvature duration misses. The seventh reads a real yield curve and pulls a forward rate out of it. The last one is about what a spread is, and what three different filed interest rates are not.
The arithmetic is round so it can be recomputed. Where a real rate is needed it is the US Treasury par curve for 11 September 2026, and the last lesson uses one company's own filed debt note, with the accession number.
The course does not forecast rates and does not say what a spread should be. Neither is knowable, and the point of the arithmetic is to make the size of what you do not know visible.
The tools, not the work
Rates, bonds and the curve is 8 lessons on the arithmetic and the rules an investor has to be able to handle: the discounting, the probability, the standards, the tax. They are what you work WITH. None of them is work done on a company you own, and a tool understood is not a book checked.
Related
- The discount factor is the arithmetic this course applies, and the course to finish before starting this one.
- Bonds, yields and spreads is the equity investor's reading of a spread, which this course supplies the arithmetic for.
- Three ways to measure debt is where a maturity schedule like the one in this course meets a company's ratios.
See our methodology for how the product reads a filing and what it refuses to compute.