Stocks+Quest+Lesson+4

Here you can view and download Stocks Quest Lesson 4 Understanding Bonds.



What is a Bond?
A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the [|funds] for a defined period of time at a fixed interest rate. Bonds are used by companies, municipalities, states and U.S. and foreign governments to finance a variety of projects and activities. Bonds are commonly referred to as fixed-income securities and are one of the three main asset classes, along with stocks and cash equivalents..

More on Bonds...
The indebted entity (issuer) issues a bond that states the interstrate (coupon ) that will be paid and when the loaned funds (bond principal) are to be returned (maturity date). Interest on bonds is usually paid every six months (semi-annually). The main categories of bonds are corporate bonds, municipal bonds, and U.S. Treasury bonds, notes and bills, which are collectively referred to as simply "Treasuries".

Two features of a bond - credit quality and duration - are the principal determinants of a bond's interest rate. Bond maturities range from a 90-day Treasury bill to a 30-year government bond. Corporate and municipals are typically in the three to 10-year range.

media type="youtube" key="svOsKnWlW-g" height="315" width="560"
You can download Stocksquest Lesson 4 here

A lot of students ask me what's the difference between Stocks and Bonds. Here is a short clip explaing the two. media type="youtube" key="LCgDmbLeP8U" height="315" width="560"