A bond is a “security” which gives the holder a financial claim on the issuer. This claim protects the holder in circumstances in which the issuer is unable to pay the amount due. It is made formal by the “trust indenture,” a legal document that specifies all of the bond characteristics and the legal rights and obligations of all the parties to the agreement. Bonds are “fixed income” investments that have a fixed interest rate or coupon, payable on the principle amount, usually $100.

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Introduction to Bonds

A bond is a “security” which gives the holder a financial claim on the issuer. This claim protects the holder in circumstances in which the issuer is unable to pay the amount due. It is made formal by the “trust indenture,” a legal document that specifies all of the bond characteristicsand the legal rights and obligations of all the parties to the agreement.


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Government Bonds

Government Bonds are bonds issued by a government entity, as opposed to a private issuer such as a corporation. They are usually considered the safest bonds to invest in because of the relative stability and reliability of national economies.

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Corporate Bonds

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Foreign Currency Bonds

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Convertible Bonds

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JunkBonds

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Extendable and Retractable Bonds

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Zero Coupon Bonds

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Inflation-Linked Bonds

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Asset-Backed Securities

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Mortgage-Backed-Securities


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Valuation

The valuation of a bond depends on the size of its coupon payments, the length of time remaining until the bond matures and the current level of interest rates.
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Bond Yield

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Bond Portfolio Management

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Bond Trading

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Exciting Views on Bond Ratings!


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Interest Component

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The interest rate components are the factors that determine the interest rate for investments.
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Why Do Interest Rate Change?

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Forecasting Interest Rates

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Yield Curve Strategies


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Fiscal Policy

The fiscal policy definition for a national government dictates the ways in which it can acquire and spend money to influence the economy.

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Treasury Bills and Fiscal Policy

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Credit Rating and Analysis

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Bank Loans

Bond Article Section Descriptions

foriegn-currency-bonds-imageUnderstanding the basics of how bonds function is a critical part of financial literacy. In general bonds refer to debt while stocks refer to equity.

Bond basics describes the basic definitions and characteristics of bonds. Bond characteristics are important because they outline the conditions of the investment and the payment and interest terms.

While defining a bond is usually more straightforward, the characteristics of a particular bond can differ based on the type of bond, the issuer, and the investor’s preferences.

types-of-bonds-imageThe types of bonds section of the website outlines the characteristics for a wide variety of different bonds that one would invest in.

Government bonds are bonds issued by a government entity, as opposed to a private issuer in the case of corporate bonds. They are usually considered the safest bonds to invest in because of the relative stability and reliability of national economies.

In addition to these divisions, there are different types of bonds based on a number of factors, such as how they offer payouts, legal status, or the kinds of currency or assets they are based on.

bond-portfolio-management-imageThe topic of bond management involves many different factors such as performing an accurate valuation, learning how to become a good bond portfolio manager, and learning the ins and outs of bond trading.

Trading bonds is an important aspect of global economic markets. Bonds generally can trade anywhere in the world that a buyer and seller can strike a deal. There is no central place or exchange for bond trading, as there is for publicly traded stocks.

The bond market is known as an “over-the-counter” market, rather than an exchange market.  However, bond futures, and some types of bond options, are traded on exchanges.

bonds-and-interest-rates-imageBonds and interest rates examines the interaction between interest rates and bond investment. Interest rates are the “price” that lenders charge for lending their money to borrowers.

There are many interest rate components, each reflecting a form of compensation to the lender. The interest rate components are the factors that determine the interest rate for

One of the interest rate components is the real interest rate, which is the compensation, over and above inflation, that a lender demands to lend his money.

know-moreThe related articles section of the bonds page provides information on topics that are closely related to bonds and are integral to providing a firm understanding of how bonds relate to other financial concepts.

Fiscal policy, as well as the relation between treasury bills and fiscal policy, is important to understand as the setting of such policy has a direct impact on how bonds are issued and traded.

It is also important to be able to analyze credit ratings and understand bank term loans and revolving loans as a foundational part of ones knowledge on how bonds operate.