Bond

How it is used

A core product in every portfolio. Governments and companies issue bonds; investors buy, hold and sell them. News reports talk about bond prices, bond yields and the bond market. Short-term government debt is often called bills, not bonds.

Example sentences

1. The Treasury issued a new five-year bond with a fixed coupon.

2. When interest rates rise, the price of existing bonds usually falls.

Common collocations

• issue a bond
• bond yield
• bond market
• bond price
• bond holder

Related terms

• yieldThe income an investment produces, shown as a yearly percentage of its price. For bonds, it is the return an investor gets if the bond is bought at today's price.
• couponThe regular interest payment on a bond, or the interest rate the bond pays each year on its face value, fixed when the bond is issued.
• maturityThe date when a bond or other debt must be repaid in full, or the length of time until that date.
• government bondA bond issued by a national government to borrow money, paying interest and returning the principal at maturity. It is often seen as one of the safest investments in its own currency.
• corporate bondA bond issued by a company to raise money. It usually pays a higher yield than a government bond because the risk that the company cannot pay is higher.

This word in other fields

The same English word can have a different meaning in another field:

• bond · Finance & Banking

More terms: Bonds & Fixed Income

• credit rating
• fixed income
• default