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Dunn To PerfectionFoundation

Financial Markets · Module 1: Asset Classes · Lesson 3

Bonds

Beginner 6 minLesson 3 of 7

Learning objectives

  • Explain bonds in plain language
  • Understand why it matters to markets
  • Recognise a common misconception

The concept

A bond is a loan to a government or company that pays interest.

Why it matters

Bond yields set benchmarks for all assets.

How markets interpret it

Bond prices fall when yields rise.

Key takeaways

  • Bonds = loans.
  • Price and yield move inversely.

Knowledge check

A bond is…

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