Debt instruments and bond returns
- Government securities represent sovereign or state borrowing
- Treasury bills provide short-term Government of India funding
- Zero-coupon returns come from price and redemption differences
- Fixed and floating coupons use different reset rules
- Coupon rate and current yield use different denominators
- Yield to maturity discounts promised bond cash flows
- Fixed bond cash flows imply an inverse price-yield relationship
- Reinvested coupons may earn a different rate
- Low default risk does not remove bond price or liquidity risk
- Debt securities may be secured or unsecured
- Commercial paper is short-term unsecured borrowing
- Certificates of deposit are negotiable bank funding instruments