Bonds & Fixed Income Financial Terms & Definitions

26 terms in this topic

Bonds and fixed income encompass a wide range of debt instruments issued by governments, corporations, and other entities to raise capital. Investors receive regular interest payments (coupons) and the return of principal at maturity, making them a core component of many portfolios for income and diversification. This category includes terms like yield, coupon rate, maturity, credit rating, and bond pricing.

A

Agency bond

An agency bond is a debt security issued by a government-sponsored enterprise (GSE) or a federal government agency. These bonds…

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B

Bond

A bond is a fixed-income financial instrument that represents a loan made by an investor to a borrower, typically a…

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B

Bond ladder

A bond ladder is an investment strategy that involves purchasing a portfolio of bonds with different maturity dates. Instead of…

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C

Convexity

Convexity is a measure of how the duration of a bond changes as interest rates change. Bonds have a curved,…

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C

Coupon

A coupon is the periodic interest payment made to bondholders by the bond issuer. It represents the income that investors…

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Accrued interest Accrued interest is the interest that has accumulated on a bond or other fixed-income security since the last… Agency bond An agency bond is a debt security issued by a government-sponsored enterprise (GSE) or a federal government agency.… Bond A bond is a fixed-income financial instrument that represents a loan made by an investor to a borrower,… Bond ladder A bond ladder is an investment strategy that involves purchasing a portfolio of bonds with different maturity dates.… Callable bond A callable bond is a type of bond that gives the issuer the right, but not the obligation,… Convexity Convexity is a measure of how the duration of a bond changes as interest rates change. Bonds have… Corporate bond A corporate bond is a debt security issued by a corporation to raise capital from investors. When an… Coupon A coupon is the periodic interest payment made to bondholders by the bond issuer. It represents the income… Credit rating – Fitch A Fitch credit rating is an opinion from the Fitch Ratings agency about the creditworthiness of a borrower,… Credit rating – Moody’s Moody’s Investors Service, commonly known as Moody’s, is one of the “Big Three” credit rating agencies alongside S&P… Credit rating – S&P A credit rating from S&P (Standard & Poor’s) is an opinion about the creditworthiness of a borrower, such… Credit spread A credit spread is the difference in yield between a corporate or government bond and a benchmark bond…