ShmoopTube

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

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

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

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

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

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borrow money or you promise or you you bond that

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

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

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

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

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

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

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

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

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

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

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it...

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