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bond	Security that obligates the issuer to make specified payments to the bondholder. (See page(s) 131)
coupon	The interest payments paid to the bondholder. (See page(s) 131)
coupon rate	Annual interest payment as a percentage of face value. (See page(s) 131)
credit spread	The additional yield on a bond that investors require for bearing credit risk (See page(s) 150)
current yield	Annual coupon payment divided by bond price. (See page(s) 136)
default (or credit) risk	The risk that a bond issuer may default on its bonds (See page(s) 149)
default premium or credit spread	The additional yield on a bond that investors require for bearing credit risk
face value	Payment at the maturity of the bond. Also called par value, maturity value, or principal. (See page(s) 131)
Fisher effect	The nominal interest rate is determined by the real interest rate and the expected rate of inflation. (See page(s) 146)
interest rate risk	The risk in bond prices due to fluctuations in interest rates. (See page(s) 148)
investment grade	Bonds rated Baa or above by Moody’s, or BBB or above by Standard & Poor’s or DBRS. (See page(s) 150)
junk bond	Bond with a rating below Baa or BBB. (See page(s) 150)
rate of return	Total income per period per dollar invested. (See page(s) 139)
real return bond	Bond with variable nominal coupon payments, determined by a fixed real coupon payment and the inflation rate. (See page(s) 145)
yield curve or term structure	Graph of the relationship between time to maturity and yield to maturity, for bonds that differ only in their maturity dates.
yield to maturity	Interest rate for which the present value of the bond’s payments equals the price. (See page(s) 137)