This was an interesting unit for me to learn about. I truthfully did not understand the complexity of bonds. Bonds are loans where the borrower agrees to pay back the amount borrowed after an agreed amount of time and pay regular interest payments. The amount of time is considered the bond maturity. The interest paid on the loan is considered the coupon. The coupon rate does not change for the duration of the loan. What can change is the price or current value of the bond and the bond yield. Both of these factors are dependent on market trends. As market interest rates increase, the value of the bond will decrease because investors will see better returns elsewhere. The opposite is also true, as market interest rates decrease the bond rates increase. Other factors, such as length until maturity, after the yield. Typically loans with shorter terms have lower yields because they are less risky and less affected by market changes. Loans with longer terms are impacted more by market changes and therefore higher risk and higher yield.$($What Is a Bond and How Do They Work?