The essential difference between a bond and a stock is that when you buy a stock, you become part owner of the company. ... billion shares of Fordabut you do own a piece of the company. ... the bond matures (that translates into interest- rate risk) and how confident you are that the business or government can repay the loan (known as credit quality). ... Duration boils down to the three risk factors of bonds: maturity, the cash flows from coupons and principal, and current interest rates.
|Title||:||Morningstar Guide to Mutual Funds|
|Author||:||Christine Benz, Peter Di Teresa, Russel Kinnel|
|Publisher||:||John Wiley & Sons - 2003-02-17|