Fixed Interest Portfolios

Abstract

All interest rate instruments are loans. For a standard interest rate transaction the borrower, provided he or she meets all repayment obligations, retains the right to the assets he or she owns. The lender has no call on the assets of the borrower, except for the amount of the loan and interest earned. This chapter is about portfolios comprising fixed interest instruments, including bonds, bills and notes, issued in the currency of the investor by government, semi-government organizations and banks, which are usually assumed to have negligible or very low risk of default by the issuer.

But now I would like to come back as the bond market. You can intimidate everybody.

James Carville, political advisor to President Clinton