Treasury bonds
Definition
Treasury bonds are long-term debt securities issued by the U.S. Department of Treasury with a maturity period of 10 years or more. They are considered low-risk investments because they are backed by the full faith and credit of the U.S. government.
Analogy
Imagine treasury bonds as "financial superheroes" that protect your investment with an indestructible shield. Just like how superheroes save people from danger, treasury bonds provide a safe haven for investors during uncertain times.
Related terms
Yield curve: A graphical representation of yields on similar debt instruments (like treasury bonds) plotted against their maturities, showing how interest rates vary across different time periods.
Bond market: The marketplace where investors buy and sell various types of debt securities, including treasury bonds, corporate bonds, municipal bonds, etc.
Coupon rate: The fixed interest rate that a bond issuer promises to pay to bondholders annually or semi-annually until the bond matures.
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