Financial Market Rates and Flows, Sixth Edition, provides conceptual basis from which to understand interest rates, how they behave with changing market conditions, and how risk can be managed. This highly respected text can be used for courses in undergraduate investments, graduate investments, financial markets and institutions, fixed income securities, bond markets, and money and banking.New Features to the Sixth Edition Include: New section on liquidity presents students with information on the treatment of credit ratings, default losses and migration patterns, quality yield spreads over time, high-yield debt, and yield spreads with respect to maturity. Updated data on the flow of funds (chapter 2) offers students new information regarding the total debt outstanding for various major sectors of the economy. Enhanced coverage on inflation and returns introduces students to a section on inflation-indexed bonds and Treasury TIPS. Improved chapter on the term structure of interest rates (chapter 6) familiarizes students with modeling the term structure as well as with relevant empirical work. Detailed treatment of bond portfolio management illustrates for students the arbitrage efficiency between zero-coupon and coupon bonds with an actual situation. Expanded chapter on derivative securities enables students to explore a very important market that is continually developing. Rewritten chapter on mortgage securities that covers mortgage derivatives, modeling prepayments, and "TBA" pricing that reflects important changes in mortgage-backed securities. Reorganized treatment of municipal bonds helps explain the nature of the market and the valuation of municipals in relation to taxable bonds.