Investopedia Video: Introduction To Bonds Video

Find out how this method of debt investment is used to finance various levels of government and private companies.

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thank you it gave ...
thank you it gave me a idea of what and how bonds work, i'd say for a first timer to? Bonds this is helpful info \m/

Not 100%. If you ...
Not 100%. If you buy a CD that is offers 10% you will make $10 on your $100 investment by the end of the year. If you purchase a 10% semi annual coupon bond, you will receive $5 mid year and $5 at the end. Receiving your interest earlier has a greater value associated with it. It's just like would you rather take $1,000,000 today or a year from today? The difference is? pretty immaterial, but still should be noted.

You earn the coupon ...
You earn the coupon regularly, you are correct about that. The reason you may resell a bond is just like why you might sell a stock, because it's value has peaked. Bonds fluctuate in price just like stocks when new bonds are released. If they offer better bonds after you? purchase yours, your bond is worth less. But if they issue worse bonds, you might want to sell yours now at a premium. Hopefully that makes sense.

Clarifying- you ...
Clarifying- you earn interest/coupon EVERY year until maturity... Why resell? a bond then? Does the coupon ever go down? Or is it people just aren't patient enough?

So a bond is pretty ...
So a bond is pretty much like a CD...? e.g. A 1.10 CD is the same as a bond with a 10% coupon? And why would people sell bonds, does the? coupon ever rise?

thanks so? much!!!
thanks so? much!!!

Epic! Thanks for ...
Epic! Thanks for sharing!?

Awsome?
Awsome?

So does your bond's ...
So does your bond's face? value change as the price fluctuates? Or is it locked in when you buy it?

thanks? a ton :D
thanks? a ton :D

Well, it might help ...
Well, it might help you understand this by flipping your sentence: there is a higher interest rate whenever there is higher risk. Think about that for a few seconds, and let? me know whether you get it now or not.

f the institution ...
f the institution writing the bond gives a high coupon it is because it is not financially strong? enough to convince bond holders to lend money at a low interest rate. The interest is? the compensation of the risk taken: the higher the risk, the higher the interest.

why is there more ...
why is there more risk when there? is a higher interest rate on the bond?

This helped me in ...
This helped me in my finance exam, after? my useless lecturer never explain bonds. Thanks!

I absolutely love? ...
I absolutely love? you guys!