Name: Financial English Vocabulary VV 28 - Bonds (Lesson 1) | English Vocabulary for Finance
Uploaded: 2026-01-19T17:11:19.000Z
Duration: 7 min 15 s
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You're watching video vocab by businessenglishpod.com Bonds have been a hot topic in the news recently, but

Adverbs of manner

what exactly are bonds and how do they work?

Participle clauses

In this lesson, we'll explain some of the main ideas and vocabulary, starting with key ideas such as yields, coupons and maturity.

Then we'll get into different types of bonds and finally we'll look at how governments use bonds to finance their borrowing needs.

Bond Bond A bond is basically a loan that an investor provides to a company or government.

The company or government that sells the bond pays regular interest on the loan.

When the stock market is doing badly, many investors turn to the bond market.

Principal Principal the principal is the original amount of the loan.

While the value of the bond may change over its lifetime, the principle remains the same.

Many investors are worried that the Greek government won't be able to pay back the principal on their bonds.

Coupon Coupon the coupon or coupon rate of a bond is the amount of interest paid out as a percentage of the principal.

The coupon is set when a bond is issued and never changes.

Say you buy a $10,000 government bond with a coupon rate of 4%.

This means you will earn $400 every year for the lifetime of the bond, even if the bond's market value.

Mature Mature Every bond matures after a set period of time, such as one year, five years or 10 years.

When a bond matures or is called, the issuer of the bond repays the principal to the bondholder.

Over 70% of American treasury bonds will mature within the next five years.

Yield Yield the yield is the amount of interest earned relative to the market value of the bond.

If a bond's market value goes down, the yield goes up because the coupon rate never changes.

The difference between coupon and yield can be confusing.

Say you buy a thousand dollar corporate bond with a coupon rate of 5%.

Six months later the company gets into trouble and the market value of the bond goes down to $900.

Now the coupon is still 5% of the original price and the bondholder still earns $50 per year.

But the yield has gone up to 5.56% because the bond's market value has dropped.

Basis Points Basis Points Basis points are used in finance to describe a change in value or rate.

The Federal Reserve just raised interest rates by 25 basis points from 2.25 to 2.5%.

Now it's your turn to practice some of the words we have studied.

In this episode, you'll hear a series of sentences with a word replaced with a beep.

Repeat the whole sentence, including the missing word.

For example, if you hear investors demanded a 6% on the new corporate bond.

Investors demanded a 6% coupon on the new corporate bond.

We'll play the correct answer after each question.

Many European countries may not be able to pay back the on their bonds.

Many European countries may not be able to pay back the principal on their bonds.

When my 10 year government bonds, I will reinvest the money in municipal bonds.

When my 10 year government bonds mature, I will reinvest the money in municipal bonds.

With bonds being sold at a reduced rate, are rising.

With bonds being sold at a reduced rate, yields are rising.

That's all for this episode of Video Vocab.

Be sure to check out our website at www.videovocab.tv for more videos on business English vocabulary.

Thanks for watching and see you again soon.