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Forex Videos 93 videos

Finance: What is a strong dollar?
3 Views

A strong dollar is one that has earned trust on an international scale. It reflects a reliable currency...at least, more reliable than that of othe...

Finance: Are monopolies evil? Should they be regulated? Should they be illegal?
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Are monopolies evil? Should they be regulated? Should they be illegal? Monopolies in and of themselves, are neither good nor evil. How they conduct...

Finance: What is a Yankee Bond?
36 Views

What's a yankee bond, and does it stick a feather in its cap and call it macaroni?

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Finance: What are Bonds? 393 Views


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Description:

What are Bonds? The simplest explanation is that a bond is essentially an I.O.U. that is issued by a corporate or government institution to borrow money. They will usually list a maturity date and terms for insurance payments in return for borrowing rights. As bonds have varying degrees of collateral behind their ability to repay, ratings agencies rank bonds accordingly with their commensurate level of default risk.

Language:
English Language

Transcript

00:00

Finance a la shmoop what is a bond? well a bond is your word your promise your [Women shake hands]

00:09

handshake your John Hancock on a contracted piece of paper your mortgage

00:14

your credit card debt yeah their bonds to your "I swear I'm not a deadbeat"

00:20

declaration... that's your bond right well bonds come [Man lying on a sofa]

00:24

in many complex flavors and compositions simply put bonds are loans aka debt you

00:32

borrow money or you promise or you you bond that

00:36

you'll pay it back when you borrow money the amount you borrow is called the

00:41

principal you pay rent on that amount borrowed and that rent is called [rent appears at bank]

00:47

interest to the entity loaning you the money that interest is called yield

00:52

thank you very much for the yield like if the lender rents you a grand for a

00:57

year and you pay them a thousand 80 bucks at year-end paying back the

01:02

principal and then the rent on the money while the lender will have had a yield [Yield of lender appears]

01:07

of 8% on the grand that they loaned you so that's a bond you borrow money you

01:12

pay it back and if you don't the person who loaned you the dough well they [Person stamped with property of shmoop bank]

01:16

generally own your tuchus and yeah you know what Shakespeare said about bonds

01:20

yeah that's what he said so if you don't really know what you're doing don't do

01:24

it...

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