Novice → Intermediate
Yields and prices
When yields rise, existing bond prices usually fall — and vice versa. Education only — not a recommendation to buy, sell, or hold anything.
The seesaw
Existing fixed-coupon bonds: if new market yields rise, older bonds with lower coupons look less attractive → prices fall. If yields fall, older higher coupons look richer → prices rise.
Yield as a language
- Current yield — coupon / price (rough).
- Yield to maturity (concept) — blends price, coupons, and time if held and paid as promised.
- Yield quotes are not forecasts of your personal outcome.
Duration intuition (lite)
Longer maturities and lower coupons generally mean more price sensitivity to rate moves. You do not need a calculator here — just the sensitivity habit.
Premium and discount
- Price above par → premium bond (often lower yield than coupon).
- Price below par → discount bond.
Practice tip: Pair with Bonds: yield vs price and the Bonds SIM.