Bonds are IOUs issued by borrowers to lenders. These instruments come in various forms and are typically used by governments, local authorities, or companies to raise funds, offering fixed or variable interest rates and different terms.
Gilt-edged securities, known as gilts, are fixed-interest securities issued by the British government. They are trusted for their safety, as the risk of default by the government on interest or principal repayments is minimal.
Yield is a measure of the income generated from an investment over a particular period, expressed as a percentage of the investment's cost or current market value. This concept applies variably to fixed-interest securities and equities.
A visual representation that plots the yields of bonds with varying maturities. It is an essential tool for understanding market sentiment and interest rate expectations.
