Question by  comalua (27)

What are the fixed income derivatives?

I am trying to learn more about fixed income derivatives and how they are determined.


Answer by  shandilyan (180)

A fixed income derivative is something that is derived from something else. However, some financial derivatives are quite complex. The simplest form is "stripping" coupons from a bond to create the strips (interest only) and a zero coupon bond (principal only). More complex structures involve taking similar individual mortgages and creating a "pool" so investors can buy large blocks.


Answer by  Hasan72 (572)

Fixed Income Derivatives are traded in a unique market structure which refers to s "stripping" coupons from a bond to create the strips and a zero coupon bond.

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