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Topic
Bonds
42 guides in Finabase Learn
- Asset allocation: how stock, bond and cash mixes have behaved What asset allocation is, how 23 years of stock and bond mixes actually behaved, how rebalancing and target-date funds work, and what shapes the right mix.
- Asset classes explained: stocks, bonds, cash, real assets and more What an asset class is, how stocks, bonds, cash, real estate, commodities, currencies, crypto and derivatives differ, and what 19 years of ETF prices show.
- Basis point One hundredth of a percentage point (0.01%), the standard unit for quoting changes in interest rates, yields and fees.
- Bond A loan from an investor to a government or company that pays interest on a schedule and returns the principal at maturity.
- Bond duration and convexity: measuring interest-rate risk How Macaulay and modified duration are calculated, a worked 10-year bond example, when convexity matters, and what duration did to Treasury ETFs in 2020–2024.
- Bond ETFs vs individual bonds: maturity, risk and cost compared Why a bond fund never matures, why holding a bond to maturity doesn’t erase a rate loss, and how costs, diversification and ladders compare, with worked numbers.
- Bond prices and yields: why prices fall when yields rise The present-value math behind bond prices, worked examples of price, current yield and yield to maturity, pull to par, and what TLT did when the 30-year yield rose.
- Bonds and fixed income: how bonds work, pay and lose value What a bond is, how its cash flows and price are calculated, the main types of fixed income, the five risks to know, and what the 2020–2023 rate shock did to bond ETFs.
- Convertible Bond A corporate bond that the holder can exchange for a set number of the issuer's shares, trading a lower coupon for equity upside.
- Corporate and high-yield bonds: how company debt behaves How corporate bonds work, what separates investment grade from high yield, and how LQD, HYG and IEF prices behaved in 2008, 2020 and the 2022 rate shock.
- Corporate Bond Debt issued by a company to raise money, paying interest and carrying more credit risk than government bonds of similar maturity.
- Coupon The annual interest a bond pays, stated as a percentage of its face value; a 5% coupon on a $1,000 bond pays $50 a year.
- Credit Default Swap (CDS) A contract in which one party pays a regular fee to another for protection against a borrower defaulting on its debt.
- Credit rating A letter grade from agencies such as S&P, Moody's and Fitch that estimates a borrower's ability to repay its debt.
- Credit ratings and credit spreads: how bond risk is priced How the AAA-to-D rating scales work, who the SEC-registered rating agencies are, and how to read the yield spread between corporate bonds and Treasuries.
- Credit Risk The risk that a borrower fails to make promised interest or principal payments in full and on time.
- Credit Spread The extra yield a corporate or other risky bond pays over a Treasury of similar maturity, reflecting perceived credit risk.
- Default A borrower's failure to make a required interest or principal payment, or to meet other terms of a loan or bond.
- Duration A measure of a bond's price sensitivity to interest rates: a duration of 7 means about a 7% price drop for a one-point rise in yields.
- Face value (par value) The amount a bond pays back at maturity, commonly $1,000, on which coupon payments are calculated.
- High-yield bond A bond rated below investment grade (below BBB- or Baa3), paying higher interest to compensate for greater default risk.
- Interest rate The price of borrowing money, stated as a yearly percentage of the amount borrowed, and the return paid to savers and lenders.
- Interest-rate risk The risk that rising interest rates lower the price of existing bonds and other rate-sensitive investments.
- Inverted yield curve A yield curve on which short-term yields exceed long-term yields, which has preceded most US recessions since the 1960s.
- Investment grade A credit rating of BBB- (S&P/Fitch) or Baa3 (Moody's) or higher, indicating relatively low default risk.
- Junk bond The informal name for a high-yield bond: debt rated below investment grade that pays more for its higher risk of default.
- Maturity The date on which a bond's principal is due to be repaid and interest payments stop.
- Municipal bond A bond issued by a US state, city or other local government, whose interest is often exempt from federal income tax.
- Municipal bonds: GO vs revenue bonds and tax-free yield math How municipal bonds work, general obligation vs revenue bonds, the federal and state tax exemptions, taxable-equivalent yield by bracket, and how MUB has behaved.
- Principal The original sum invested or borrowed, as distinct from interest or returns; for a bond, the face amount repaid at maturity.
- The 2022 bear market: inflation, Fed hikes and falling bonds Why stocks and bonds fell together in 2022, how the Fed’s fastest hikes in decades drove a 25% S&P 500 decline, and what SPY, QQQ and TLT data show.
- The yield curve: shapes, slopes and what each end tells you How the Treasury yield curve is built, why it slopes up, flattens or inverts, what the short and long ends reflect, and how to read it with real 1960–2026 data.
- TIPS and breakeven inflation: how inflation-protected bonds work How TIPS adjust principal for inflation, how breakeven inflation is read from TIPS and Treasury yields, and how breakevens compare with realized CPI.
- Treasury bill Short-term US government debt maturing in one year or less, sold at a discount to face value and repaid in full at maturity.
- Treasury bond Long-term US government debt issued with a 20- or 30-year maturity, paying a fixed coupon every six months and highly sensitive to interest rates.
- Treasury Inflation-Protected Securities (TIPS) US Treasury bonds whose principal rises and falls with the Consumer Price Index, so their interest and final payment keep pace with inflation.
- Treasury note US government debt with a maturity of two to ten years that pays a fixed coupon every six months; the 10-year note is a global benchmark rate.
- Treasury yield The annual return investors earn for lending to the US government at a given maturity, the benchmark that most other interest rates are priced from.
- Yield The income an investment pays, such as interest or dividends, expressed as a percentage of its price or cost, usually per year.
- Yield curve A line plotting Treasury yields across maturities, from months to 30 years, whose slope reflects rate expectations and is read as an economic signal.
- Yield to maturity (YTM) The annual return a bond delivers if bought at today’s price and held to maturity, counting every coupon plus the gain or loss to face value.
- Zero-coupon bond A bond that pays no periodic interest, sold at a deep discount and repaid at full face value at maturity, so the discount is the return.
Educational content, not investment advice. Finabase Learn explains how markets and tools work. It does not recommend any security or strategy, and examples are for illustration only. Investing involves risk, including the loss of principal. Rules and figures are for the United States unless stated and can change — check the cited source before you act.