ABSTRACT
INTRODUCTION In this chapter, we look in more detail at the capital market’s fi xed-income segment, the bond market, by discussing the fundamentals and valuation of bond instruments. In general, a fi xed-income security is one that pays an even, specifi ed amount calculated by a specifi c formula over a predetermined period. Because a bond is the main fi xedincome security, we devote special attention to it. Compared with equities, a bond is a relatively convenient and secure investment instrument and is often part of any investor’s portfolio.
