In this module, we introduced bonds. First, I want to tell you why there's a need for bonds. Let's think about big corporations. They have a lot of financing needs, they need to finance their daily operations, they need to expand their business to a new market or create new products. They need to invest in research and development, or they need to acquire another company. How do they finance all these activities? One way is to borrow money by selling bonds to the public. For example, they borrow $1,000 from each individual bond holders and collectively, they raise enough money to fund their projects. In fact, the bond is a very simple arrangement. Companies borrow money from you and promise to pay you back in the future. Once the company use the capital they raise to make investments, they should be able to generate enough profits to pay the bondholders. They will pay them some interest payments along the way and also repay the principal they borrowed at the very end. The good thing about issuing bonds to the public is that after companies pay back their debt, they can enjoy all the remaining profits themselves. But this comes at a cost. If they fail to repay the debt, they will be sued and even go broke. Besides corporations, another big player in the bond market is the government. The federal government needs to spend money on food staffs, unemployment compensation, child's nutrition, student loans, benefits for Medicare and Medicaid, and among others. Local governments also need to fund schools, highways construction, airport construction, and other infrastructure. They can use the money they collected from taxpayers, but that's far from enough. They need to issue bonds to raise more money and use the revenues generated from these projects to pay back in the future. From the perspective of investors, bonds also represent good investment opportunities. The future cashflows are pretty stable and reliable, the return is descent compared with other investment vehicles. In general, investors will put some bonds in their portfolio more or less. In this module, we want to introduce you to the basic bond features and the common bond types. These serve as foundations to understand how bonds work. We will also address some important questions about bonds. For example, how to determine bond values, why bond values fluctuate in the marketplace, what are the major risks of investing year bond? What is the meaning of bond rating? After this module, you should be able to answer all these questions and understand this important financial instrument.