Fixed Income Securities

  • David Ruppert
  • David S. Matteson
Part of the Springer Texts in Statistics book series (STS)


Corporations finance their operations by selling stock and bonds. Owning a share of stock means partial ownership of the company. Stockholders share in both the profits and losses of the company. Owning a bond is different. When you buy a bond you are loaning money to the corporation, though bonds, unlike loans, are tradeable. The corporation is obligated to pay back the principal and to pay interest as stipulated by the bond. The bond owner receives a fixed stream of income, unless the corporation defaults on the bond. For this reason, bonds are called “fixed income” securities.


Interest Rate Cash Flow Term Structure Yield Curve Forward Rate 
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Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  • David Ruppert
    • 1
  • David S. Matteson
    • 2
  1. 1.Department of Statistical Science and School of ORIECornell UniversityIthacaUSA
  2. 2.Department of Statistical Science Department of Social StatisticsCornell UniversityIthacaUSA

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