#1
What is a bond?
A type of investment that represents a loan made by an investor to a borrower
ExplanationInvestment representing a loan to a borrower.
#2
What is the maturity date of a bond?
The date when the bond's principal amount is repaid
ExplanationDate when bond's principal is repaid.
#3
What is a Treasury bond?
A bond issued by the U.S. government
ExplanationBond issued by U.S. government.
#4
What is a bond index?
An index that tracks the performance of a specific group of bonds
ExplanationIndex tracking bond group performance.
#5
What is the coupon rate of a bond?
The rate at which a bond's interest payments are made
ExplanationRate of bond's interest payments.
#6
What is a callable bond?
A bond that the issuer can redeem before its maturity date
ExplanationBond redeemable before maturity.
#7
What is the difference between a bond and a stock?
Bonds represent debt, while stocks represent ownership in a company.
ExplanationBonds represent debt, stocks represent ownership.
#8
What is a junk bond?
A bond with a low credit rating
ExplanationBond with low credit rating.
#9
What is the difference between a government bond and a corporate bond?
Government bonds have lower credit risk compared to corporate bonds.
ExplanationGovernment bonds have lower credit risk.
#10
What is the role of credit ratings in bond investing?
To assess the creditworthiness of bond issuers
ExplanationAssess bond issuers' creditworthiness.
#11
What is duration in bond investing?
A measure of a bond's price sensitivity to changes in interest rates
ExplanationMeasure of bond's price sensitivity to rate changes.
#12
What is yield to maturity (YTM)?
The rate of return earned on a bond if it is held until maturity
ExplanationRate of return on bond if held to maturity.
#13
What is convexity in bond investing?
The curve that represents a bond's price sensitivity to changes in interest rates
ExplanationCurve representing bond's price sensitivity.
#14
What is a zero-coupon bond?
A bond that pays no interest during its term but is sold at a discount
ExplanationBond with no interest, sold at discount.
#15
What is a bond ladder?
A strategy to mitigate interest rate risk in bond investing
ExplanationStrategy to mitigate interest rate risk.
#16
What is a convertible bond?
A bond that can be converted into shares of the issuing company
ExplanationBond convertible into company shares.