1.1. In this note it is argued that models of the gilt-edged market which are based on yield curves are unnecessarily restrictive and should not be expected to give a satisfactory statistical ‘fit’ in current conditions. The new model which is formulated relates market prices directly to the life and coupon without diverting into the computation of redemption yields. Indeed, it is suggested that the yield calculation destroys the inherent simplicity of the underlying equations—which follow from a simple assumption concerning the return from different portfolios. The method avoids the inconsistency inherent in the conventional analysis of discounting future investment proceeds at a uniform rate of interest when the yield curve itself implies that interest rates will vary in the future.