Why do US interest rates and inflation forecasts affect bond yields? Cherry Reynard explains the workings of a confusing asset class.
Bonds Beginner's Guides
When you invest in a bond, you are lending money to the bond issuer, generally for a specified time period. In return, the issuer is legally obliged to pay interest, or coupon, at a pre-agreed rate and to repay the original amount borrowed, principal, face value, nominal value, or par value on the repayment date (maturity).
We look at how agencies such as Standard & Poor's and Moody's rate bonds, and what the ratings mean.