Curriculum node for Bonds. Full lesson content is created and versioned separately.
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A bond is a debt security in which an investor lends money to an issuer—such as a government, municipality, or corporation. The issuer generally promises to repay principal at maturity and may pay interest under the bond’s terms.
supported with limitationsCommon bond terms include face value or par value, maturity date, coupon rate, and yield to maturity.
supportedWhen market interest rates rise, existing fixed-rate bond prices generally fall; when market interest rates fall, existing fixed-rate bond prices generally rise.
supportedSelling a bond before maturity can result in receiving more or less than its face value because its market price changes.
Bond investors face risks including issuer credit or default risk, interest-rate risk, inflation risk, liquidity risk, and, for callable bonds, call risk.
supportedCorporate bond investors lend to a company but do not receive ownership equity merely by holding the bond.
supportedThe U.S. Treasury issues marketable Treasury bills, notes, bonds, Treasury Inflation-Protected Securities, and floating-rate notes.
supportedTreasury bills generally mature in one year or less, Treasury notes have maturities greater than one year and no more than ten years, and Treasury bonds have maturities longer than ten years.
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