The chapter covers basic elements from fixed income, such as cash flows and rate definitions. A section is devoted to bond risk management, where the classical measures Macaulay and Fisher-Weil durations are discussed together with the more nuanced key interest rate sensitivity method. Fundamental fixed income instruments, such as repo, swaps, swaptions, and caps/floors, are also presented. The central pricing equation for callable mortgage bonds is then introduced, followed by the definitions of the conditional prepayment rate and option-adjusted spread. Finally, a simple model for the value of high-yield vintage callable mortgage bonds is developed.