Abstract
This chapter presents a brief overview of the main tenets of fixed income analysis as it appears in the current literature. It illustrates basic concepts, which is followed by a discussion of yield curve analysis and the term structure of interest rates. There are two types of fixed income security: zero-coupon bonds, also known as discount bonds or strips, and coupon bonds. A zero-coupon bond makes a single payment on its maturity date, whereas a coupon bond makes regular interest payments at regular dates up to and including its maturity date. A coupon bond may be regarded as a set of strips, with each coupon payment and the redemption payment on maturity being equivalent to a zero-coupon bond maturing on that date.
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