Money & investing · course 74 of 105

Bond Prices and Yields, Coupon to Duration

See how the numbers on a bond fit together: coupons and current yield, price from yield for coupon bonds, zeros and T-bills, yield to maturity, and duration for short bonds.

4 modules

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What it teaches

How the numbers on a bond fit together. The words (face value, coupon, maturity, yield, discount and premium), then coupon payments and current yield, then a bond’s price from its yield (a once-a-year bond, a twice-a-year bond, a zero-coupon bond and a Treasury bill), then yield to maturity, why a price falls when yields rise, and Macaulay and modified duration for short bonds. The AI asks 3 questions, places you, shows a short card per module, then gives you one question at a time.

It is not advice: it never says whether a real bond is a good buy, and it can’t price a real bond for you.

How long

34 items (10 concept questions and 24 scoring items). About 12-20 rounds for a confident student and about 55-60 for a beginner who misses often, plus a 12-item final: 1-2 sessions (from simulated students: 12 and 20 rounds as confident students, 57 rounds with 22 misses as a beginner; not timed with a real student). The tutor gives a one-line save code at the end of each session.

The modules

4 modules, drilled one item at a time.

M0
The words
The words: face value, coupon, maturity, yield, discount and premium
M1
Coupons and current yield
Coupon payments and rates, and current yield from a bond’s price
M2
Price from a yield
A bond’s price from its yield: once-a-year, twice-a-year, zero-coupon and Treasury bill
M3
Yield to maturity, price moves and duration
Yield to maturity, how far a price moves when yields rise, and Macaulay and modified duration

Before it teaches, it asks

1
Are you studying finance, starting to invest, or just curious about bonds, and do you have a calculator or spreadsheet handy?
2
A bond has a face value of $1,000 and a coupon rate of 5%, paid once a year. It is selling for $950. What is its current yield, to 2 decimal places?
3
A zero-coupon bond has a face value of $1,000 and matures in 3 years. The yield is 5% a year, compounded once a year. What is the price, to the cent?

What’s exact, and what isn’t

Show

Straight from the course’s own notes.

: Words and rules are quotes from pages saved on 2026-10-13: Investor.gov (the SEC’s investor site), the SEC’s investor bulletin of June 26, 2013, TreasuryDirect’s “Understanding Pricing and Interest Rates”, the Treasury’s rules (31 CFR 356 Appendix B, eCFR as of 2026-10-01), the Office of Thrift Supervision’s examination handbook glossary (January 2010, hosted by the OCC), and one Wikipedia page (“Bond duration”, short quotes, CC BY-SA). A script checks all 34 quotes word for word on the saved copies and fails if any saved page changes; it does not re-fetch the live pages. M0's answers are built from those quotes.
Computed by script: Every number in the M1, M2 and M3 keys, in exact fractions (yields to maturity by bisection, rounded half up at the end). Each working line is built by a script from the same numbers, and the numbers in each question are checked to appear in its working line. All 24 listed wrong answers are recomputed from the slip they name and must sit outside the grading tolerance (2 cents; 0.01 for percentages and years).
The price function is checked against published numbers: The Treasury’s own worked bond price (an 8 3/4% 30-year bond at an 8.84% yield: 99.057893 per 100), its bill price (98.097500 per 100), TreasuryDirect’s bill example ($999.27), the SEC bulletin’s two bond prices ($1,082 and $925), and TreasuryDirect’s rule that a yield above the coupon rate means a price below par. Two M3 items use the SEC bulletin’s own bond; their keys round to its $925 and $1,082.
Honest limits: The Treasury’s formula pages are written for twice-a-year coupons. The once-a-year version (r = the yield, n = years) is the same formula in the course’s own words, not a quote.
Honest limits: The price-move estimate (modified duration × basis points ÷ 100) scales the OTS glossary’s 100-basis-point example in proportion; the card says it is an estimate.
Honest limits: Every price assumes the bond is bought on a coupon payment date (no accrued interest) and that the yield compounds as the question says. Bills use days ÷ 360, as TreasuryDirect’s formula does.
Honest limits: Wikipedia’s page and the OTS glossary give the duration definitions in words; the course states the Macaulay sum in its own words from those sentences.
Honest limits: The OTS glossary line on yield to maturity has a typo (“it future cash flows”); it is quoted as printed, marked (sic).
Honest limits: It can’t price a real bond, judge a real investment, or give advice, and it isn’t connected to the SEC or the Treasury.
Not in it yet: Accrued interest and prices between coupon dates, day-count rules, the Treasury bill investment rate (coupon-equivalent yield), convexity, callable bonds, TIPS, floating-rate notes, STRIPS, the yield curve, bond funds, tax and credit risk.