Bond
InvestingGlossary term
Definition
A fixed-income investment where an investor loans money to an entity (government or corporation) that borrows the funds for a defined period at a fixed interest rate.
Related terms
- StockA share of ownership in a company. When you buy stock, you become a partial owner with potential to earn money through price appreciation and dividends.
- Treasury BondA long-term (20-30 year) debt security issued by the US government. Considered one of the safest investments, pays interest semi-annually. Used to benchmark other interest rates.
- YieldThe income return on an investment, expressed as a percentage. For bonds, it's the interest payment divided by the price. For stocks, it's the annual dividend divided by the stock price.
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