Academy
Understanding bonds
Bonds sit at the foundation of the financial system, and they are often the least understood of the major asset classes. This lesson builds from the ground up: what a bond actually is, how coupons, prices, and yields fit together, and then the harder ideas, duration, credit, and real versus nominal returns. It is written to be read in order or sampled by section, so use the table of contents and begin wherever suits you.

In this article
- What a bond is
- Who issues bonds, and why
- The global bond market
- How a bond is priced, and the price-yield relationship
- Types of yield, and the yield curve
- Yields and spreads
- Duration, and a word on convexity
- The risks of a bond
- Credit risk and ratings
- Covenants and the capital structure
- Special bonds
- Owning bonds in practice
- The role of bonds in a portfolio
- A glossary of key terms