What Are The Components Of A Bond

This lesson focuses on the components of a bond, with four main objectives: understanding par value, coupon rate, term, and market value. Using a scenario involving a CFO named Jack, the lesson explains how bonds work from an investor’s perspective, including the importance of coupon payments and the impact of changing interest rates on bond values. The lesson also covers the concept of basis points and how bond prices are affected by fluctuations in interest rates. Understanding these concepts is crucial to successful investing in bonds, and the lesson concludes with a reminder that when interest rates rise, bond prices fall, and when interest rates fall, bond prices rise.