What's a bond?

Essentially, a bond is a fancy IOU. Companies and governments issue bonds to fund their day-to-day operations or to finance specific projects. When you buy a bond, you are loaning your money to the issuer - be it General Electric or Uncle Sam - for a certain period of time.

In return, you get interest on the loan, and you get the entire loan amount paid back either on a specific date (known as the bond's maturity date) or at a future date of the issuer's choice. The length of time to maturity is called the bond's term.

Bond investors have a language all their own. A bond's value when it's issued is known as its "par value," and its interest payment is known as its "coupon." For example, a $1,000 bond paying 7% a year has a $70 coupon. Expressed another way, its "coupon rate" is 7%.

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.