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Chapter 30: Special Topics—Inflation-Linked Bonds

In this section

  • TIPS, Inflation Caps/Floors
    Detailed exploration of Treasury Inflation-Protected Securities (TIPS) and inflation caps/floors, their mechanics, and strategic portfolio applications for CFA Level II candidates.
  • Indexing Mechanisms and Break-Even Inflation
    Discover how government inflation data shapes inflation-linked bonds, the concept of break-even inflation, and the factors influencing yield spreads and market expectations.
  • Valuation Adjustments in Inflation-Linked Securities
    Explore how real discount rates, projected cash flows, and embedded deflation floors shape the valuation of inflation-linked bonds, alongside advanced topics like OAS and real option-adjusted spreads.
  • Practice Vignette: Analyzing TIPS Yields
    Explore a practical scenario of comparing Treasury Inflation-Protected Securities (TIPS) and nominal Treasuries, focusing on break-even inflation calculations, real yield analysis, and key exam strategies.
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Chapter 29: Global Bonds and Currency Risk
Chapter 31: ESG Considerations in Fixed Income