FOCUS QUESTION FOR THIS SECTION
What are the costs and benefits of investing in different types of bonds?
Section 4: Bonds
SECTION DESCRIPTION
Investors may choose bonds as an investment option. In these lessons, students will learn the characteristics of a bond and what key information is needed to evaluate a bond as an investment choice. There are different types of bonds and they all serve different purposes. Students will learn those classifications, how to examine current financial information, and how to predict the quality rating of the bond in the future. A bond is a certificate issued by a borrowing government or company promising to repay a lender by a specific date and at a specific interest rate.
LESSON OBJECTIVES
Define and identify characteristics of a bond.
LESSON OBJECTIVE
Explain that the government receives money through taxes and bonds.
List the different types of bonds—municipal, corporate, treasury—and explain how they work.
LESSON OBJECTIVES
Explain how bonds work—the relationship between yield and price.
Show examples of bond and the purpose of a bond rating. Predict the rating change outlook using the Standard & Poor’s bond rating system based on current events.
LESSON OBJECTIVES
Compare the risk associated with different bonds and sort a list of bonds from low- to high-risk.
LESSON OBJECTIVES
Write a persuasive essay giving reasons to purchase a municipal bond or Treasury bond.