Editing Fixed Income (section)

== <span style="color: #FFFFFF;">Applying</span> ==
'''Modeling 'The Bond Seesaw' (Price vs Rate):'''
<syntaxhighlight lang="python">
def calculate_bond_price(annual_coupon, face_value, years, market_rate):
    """
    Shows why bonds lose value when rates rise.
    """
    price = 0
    # Add up the present value of all coupons
    for year in range(1, years + 1):
        price += annual_coupon / ((1 + market_rate) ** year)
        
    # Add the present value of the final repayment
    price += face_value / ((1 + market_rate) ** years)
    
    return price

# Bond: $1000 face, $50 coupon (5%), 10 years.
# Market rate is 5%
print(f"Price at 5% rate: ${calculate_bond_price(50, 1000, 10, 0.05):.2f}")
# Market rate rises to 8%
print(f"Price at 8% rate: ${calculate_bond_price(50, 1000, 10, 0.08):.2f}")
# The bond 'lost' over $200 in value because of the rate hike!
</syntaxhighlight>

; Fixed Income Landmarks
: '''The 10-Year Treasury''' → The "Benchmark" of the world economy; everything from your car loan to the price of gold is based on this one number.
: '''The Asian Financial Crisis (1997)''' → Triggered when investors lost faith in the ability of Asian nations to pay back their fixed-income debts.
: '''Negative Interest Rates''' → A bizarre period in the 2020s where some governments charged investors for the "privilege" of lending them money.
: '''Inflation-Protected Bonds (TIPS)''' → Bonds where the principal increases with inflation, protecting investors from "Value Erosion."
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