What are bonds in Finance?

All About Bonds

What is bond?

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types of bonds

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Where to buy or sell?

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Bond market size

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Bonds vs STocks

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The risks

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All About Bonds

What are bonds in Finance?

What is bond?

Bonds are essentially debt instruments that corporations and governments use to raise money.

types of bonds

There are two types of bonds – fixed-rate or variable-rate bonds. Fixed-rate bonds have coupon payments that remain constant over the bond’s life, while variable-rate bonds have coupon payments that fluctuate based on market interest rates.

Where to buy or sell?

Bonds are often traded on secondary markets, such as the bond market, where investors can buy and sell bonds that have been previously issued.

Bond market size

SIFMA estimates the global bond market (total debt outstanding) to be $119 trillion and the US market to be $46 trillion.

Bonds vs STocks

Bonds are less correlated with stock prices than stocks are, making them a good diversifier for investment portfolios.

The risks

Credit and interest rate risks are the most significant risks associated with holding bonds. An issuer who does not repay the bond’s debt may default.

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Why Financial Literacy is important?