Bond
A fixed-income instrument that represents a loan made by an investor to a borrower, typically a corporation or government. The borrower agrees to pay periodic interest and return the principal at maturity.
Related terms
Credit Rating
An agency's assessment of a borrower's ability to repay debt, ranging from investment grade to speculative.
High-Yield BondDebt rated below investment grade that pays higher interest to compensate for greater default risk.
Junk BondA colloquial name for speculative-grade corporate debt with elevated yield and elevated default risk.
Municipal BondDebt issued by state or local governments, often paying interest exempt from federal income tax.
Treasury BondLong-dated debt issued by the US government, widely treated as the benchmark risk-free asset.
Yield CurveA line that plots yields of bonds with equal credit quality but differing maturity dates. It is closely watched for signals about future economic activity and interest rates.