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Fixed IncomeModule 2 of 5

Fixed-Income Cash Flows and Types

4

Concepts

3

Formulas

0

Decisions

2

Quiz Questions

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Key Concepts

4 concepts covered in this module.

Amortizing vs Bullet

Bullet: principal paid at maturity. Amortizing: principal paid gradually (e.g., mortgages). Partially amortizing: balloon payment.

Floating Rate Notes

Coupon = Reference rate + Spread. Resets periodically. Price stays near par at reset dates.

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Formulas

3 essential formulas for this module.

FRN Coupon

Coupon = Reference Rate + Spread

Where: Resets at reference rate intervals

Conversion Value

CV = Conversion Ratio × Stock Price

Where: Value if converted to equity

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Mind Map

Visual overview of how concepts connect in this module.

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Flashcard

Amortizing vs Bullet

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Answer
Bullet: principal paid at maturity. Amortizing: principal paid gradually (e.g., mortgages). Partially amortizing: balloon payment.
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Fixed-Income Instrument Features

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Fixed-Income Bond Valuation