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Bonds & Fixed Income

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Bonds & Fixed Income

Inflation-Indexed Bond

A bond whose principal is adjusted for inflation, so both the coupon and the redemption amount rise with prices.

Adjusted Principal = Original Principal x (Current Index Value / Index Value at Issue); Coupon = Adjusted Principal x Real Coupon Rate ₹ Bonds & Fixed Income

Inverted Yield Curve

A yield curve on which short-maturity yields exceed long-maturity yields.

Test: yield on a short maturity, such as two years, exceeds the yield on a longer one, such as ten years % Bonds & Fixed Income

Investment Grade

A credit rating of BBB minus or above, indicating relatively low expected default risk.

Test: the rating is BBB- or higher on the standard scale qualitative