Options & Bonds
What is Bond?
A loan you give to a company or government that pays you interest
Full Explanation
When you buy a bond, you're lending money to a company or government. They pay you regular interest (the "coupon") and return your principal when the bond matures. Bonds are generally safer than stocks but lower return.
Real-World Example
Buy a 10-year Treasury bond at 4.5% yield — the government pays 4.5% annually and returns your money in 10 years.
Pro Tip
When interest rates rise, bond prices fall. When rates fall, bond prices rise. They move opposite.
Guides that use this term
Related Options & Bonds Terms
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