Accrued Interest
The portion of the next coupon payment that has accumulated since the last coupon date, paid by the buyer to the seller at settlement.
Agency Bond
Debt securities issued by U.S. government-sponsored enterprises or federal agencies, typically offering slightly higher yields than Treasuries.
Basis Point
One one-hundredth of a percentage point (0.01%), used as the standard unit of measure for interest rates, bond yields, and spreads.
Benchmark Bond
The most recently issued, most actively traded bond of a given maturity used as the reference rate for pricing other fixed-income securities.
Bond Covenant
Contractual conditions in a bond indenture that restrict issuer behavior to protect bondholders from increased risk after issuance.
Bond Default
A bond default occurs when an issuer fails to make a scheduled interest or principal payment as specified in the bond indenture.
Bond Duration
A measure of a bond's price sensitivity to interest rate changes, expressed in years.
Bond ETF
An exchange-traded fund that holds a portfolio of bonds, offering diversified fixed-income exposure with the liquidity and tradability of stocks.
Bond Fund
A mutual fund or ETF that pools investor capital to purchase a diversified portfolio of bonds, providing fixed-income exposure to retail investors.
Bond Ladder
An investment strategy of buying bonds with staggered maturities to manage interest rate risk and provide regular income.
Bond Market
The global marketplace where debt securities are issued, bought, and sold, encompassing government, corporate, and other fixed-income instruments.
Bond Price
The present value of a bond's future coupon payments and par repayment, discounted at the required yield.
Bond Rating
A letter-grade assessment of a bond issuer's creditworthiness.
Bond
A debt instrument representing a loan from an investor to a borrower.
Callable Bond
A bond that the issuer can redeem before the maturity date.
Clean Price
The quoted price of a bond that excludes accrued interest, representing only the present value of future cash flows.
Convertible Bond
A bond that can be converted into a set number of the issuer's shares.
Convexity
The second-order measure of a bond's price sensitivity to yield changes, capturing the curvature that modified duration misses.
Corporate Bond
A debt security issued by a corporation to raise capital from investors.
Coupon Payment
The periodic interest payment a bondholder receives, equal to the face value multiplied by the coupon rate divided by the payment frequency.
Coupon Rate
The annual interest rate a bond pays as a percentage of its face value.
Credit Spread
The additional yield a corporate bond pays over a comparable-maturity Treasury bond, compensating investors for credit risk.
Current Yield
A bond's annual coupon payment divided by its current market price, expressing the income return as a percentage.
Dirty Price
The full price of a bond including accrued interest—the actual amount a buyer pays at settlement.
Discount Bond
A bond that trades below its face (par) value, offering investors a built-in capital gain at maturity when the principal is repaid at par.
Duration Risk
The sensitivity of a bond's price to changes in interest rates, increasing with longer maturities.
Effective Duration
A numerical duration measure that uses actual price changes from parallel yield shifts, suitable for bonds with embedded options.
Face Value
The nominal value of a bond repaid at maturity.
Fallen Angel
A bond that was originally rated investment grade but has since been downgraded to high-yield (junk) status due to deteriorating credit quality.
Fixed Income
A class of investments that pay a predetermined, regular stream of interest payments and return principal at maturity, including bonds and notes.
Floating Rate Note
A debt security whose coupon rate resets periodically based on a reference benchmark rate, providing protection against rising interest rates.
GO Bond
A municipal bond backed by the full faith, credit, and taxing power of the issuing government.
Green Bond
A fixed-income security issued to raise capital specifically for projects with environmental or climate benefits.
Inflation-Linked Bond
A bond whose principal and interest payments adjust with an inflation index, protecting investors from purchasing power erosion.
Interest Rate Risk
The risk that rising interest rates will cause the market value of fixed-income investments to fall, since bond prices move inversely to yields.
Investment Grade
A bond rating of BBB−/Baa3 or above, indicating low default risk.
Junk Bond
A high-yield bond rated below investment grade, carrying higher default risk.
Macaulay Duration
The weighted-average time (in years) to receive all of a bond's cash flows, used as a measure of interest rate sensitivity.
Maturity Date
The date on which a bond's principal is repaid to the investor.
Modified Duration
Estimates the percentage price change of a bond for a 1% change in yield.
Municipal Bond
A bond issued by a state, city, or local government to fund public projects, typically tax-exempt.
On-the-Run
The most recently issued U.S. Treasury security of a given maturity, which serves as the benchmark and commands the highest liquidity.
Option-Adjusted Spread
The yield spread of a bond over a benchmark rate, adjusted to remove the value of any embedded options such as call or put provisions.
Par Bond
A bond that trades at exactly its face (par) value because its coupon rate matches the prevailing market yield for comparable bonds.
Duration Price Approximation
Approximates the dollar price change of a bond from a given yield shift using modified duration.
Putable Bond
A bond that gives the holder the right to sell the bond back to the issuer at a specified price before maturity.
Repo Rate
The interest rate on a repurchase agreement, where one party sells securities and agrees to repurchase them at a slightly higher price.
Revenue Bond
A municipal bond backed by revenue generated from a specific project or facility rather than general tax revenue.
Reverse Repo
A transaction where a party purchases securities and agrees to sell them back at a higher price, effectively lending money secured by securities.
Sovereign Bond
A debt security issued by a national government to fund public expenditures, backed by the government's taxing power and creditworthiness.
Strip Bond
A zero-coupon security created by separating a bond's coupon payments and principal into individual tradable instruments.
Subordinated Debt
Debt that ranks below senior creditors in bankruptcy proceedings, compensating investors with higher yields for the greater loss risk.
Treasury Bill
A short-term U.S. government security with maturities of 4 to 52 weeks, sold at a discount to face value and paying no periodic interest.
Treasury Bond
A long-term US government debt security with maturities of 20 or 30 years.
TIPS
U.S. government bonds whose principal adjusts with the Consumer Price Index, protecting investors from inflation.
Treasury Note
A medium-term U.S. government security with maturities of 2 to 10 years, paying semiannual fixed interest coupons.
Yield Spread
The difference in yield between two bonds, used to measure relative risk, credit quality, or economic expectations.
Yield to Maturity
The total return anticipated on a bond if held until it matures, expressed as an annual percentage rate.
Yield to Call
The annualised return an investor earns if a callable bond is called by the issuer on the first call date.
Yield to Maturity
The total annualised return an investor earns by holding a bond to maturity, accounting for price, coupons, and par repayment.
Zero-Coupon Bond
A bond that pays no periodic interest and is issued at a deep discount to face value.