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Introduction to bonds | Stocks and bonds | Finance & Capital Markets | Khan Academy

2174 ratings | 503396 views
What it means to buy a bond. Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/introduction-to-the-yield-curve?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/corporate-debt-versus-traditional-mortgages?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Finance and capital markets on Khan Academy: Both corporations and governments can borrow money by selling bonds. This tutorial explains how this works and how bond prices relate to interest rates. In general, understanding this not only helps you with your own investing, but gives you a lens on the entire global economy. About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content. For free. For everyone. Forever. #YouCanLearnAnything Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1 Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy
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Text Comments (83)
The Angel Ndoo (26 days ago)
Thank you 🙏🏻 ❤️❤️.. This is so helpful ✨
Zhalgas Nussipbek (1 month ago)
Chechnka95 nox (2 months ago)
I don’t understand 😭😭😭 i was doing well but then idk what happened when ge started with issuing bonds
Mark Morales (2 months ago)
Where do u buy bonds? I want my kid to have a better start then I did.
Julie is family (3 months ago)
U r the only one to watch with English language without Indian accent. Thx dear
Moin Uddin (4 months ago)
Sir plz provide lectures in Hindi also
Joel Gaffley (4 months ago)
This video is great!
Franklin Ramirez (6 months ago)
Great video helped me understand a lot, thank you.
Michele Salvemini (7 months ago)
Finally I got something about this. Thanks !!
Nayem Ahmed (7 months ago)
Thank you so much for your video 'Sir'. I didn't understand in my class about bond but I did understand from your video. Could you please explain about mortgage loan? Thanks
Sos (8 months ago)
How do I find bonds to invest in
Blazer433 (8 months ago)
is it necessary to key in the P/Y? Since we already made n = 26
Brian Wakista (8 months ago)
Holy crap i'm only 14 and I understand thanks so much
Jamil (9 months ago)
So in order to evaluate a great bond you would have to calculate the real interest value, correct? Ex: if a central bank sets the interest rate at 6% and the the coupon rate is 7%, then you would have made a profit. It's tricky because you'd have to anticipate what the interest rate is gonna be, anyone have any thoughts on this?
Man Spider (9 months ago)
difference between debenture and bonds?
Hong Vu Thu (9 months ago)
thanks so much for the video. without your series, I couldnt pass any subject related to finance and statistics :( thanks again!
Brian Fernandes (10 months ago)
This is amazing just to realize how things around work. The information is gold.
HATE is a sign of ENVY (10 months ago)
FINALLY....... I understand
Mike Sisto (10 months ago)
Great video! Definitely answered any questions I had!
brandan broome (10 months ago)
thank you very much. This cleared up a lot of questions I had.
Laura Marple (11 months ago)
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Lakshmi Priya (1 year ago)
Very well explained...thanks a ton..:)
Guillaume Van Aelst (1 year ago)
Very good video although a bit slow...
Q Mobile (1 year ago)
Shareholders will lose money in case of bankruptcy
Lonnie Atterbury (1 year ago)
wow i completely learned something.
P - (1 year ago)
Freaking thank you!! I have read already 3 whole academic books, been to multiple classes, several teachers, and a lot of power points and such. Your video finally helped me!!!!!
BERNIE 2020 Peace (1 year ago)
awesomeness !!
Sara Brandy (1 year ago)
I cant believe i didnt get this in college but now after watching this, I do.
Jay Pratik (1 year ago)
So there is no risk while buying bond?
Bob Kmak (1 year ago)
Jay Pratik The company can go bankrupt.
linda owens (1 year ago)
I am happy cos i contacted mr williAms on the right time,i would have given all my money away to those scammers,but when i saw people comments about mr williams,i gave him a try and he help me with his strategy,mr williams you are the best i have ever seen,you have been doing it for other people and you did it for me thank you so much sir.
RyGuyMemes (1 year ago)
I use khan academy for school and clicked on the video randomly and was like *I KNOW THAT VOICE.* lol
Joseph White (1 year ago)
i just watch to see his handwriting improve
Curtis McEachern (1 year ago)
Keveen Mihdidin (1 year ago)
Sunil Kannaujiya (1 year ago)
really helpful , thanks ...
Michael Prickett (1 year ago)
Is there a field this guy doesnt study lol
highway79 (1 year ago)
short question, what kind of program is used to create the video + graphic presentation? I believe this is produced by the pen and the pad, as using mouse won't be that precise. Thanks
Mengdi Shi (1 year ago)
Thank you!
bernice043 (1 year ago)
Thank you so much for this. it's so good to finally understand bonds.
Mawazo Chanya (1 year ago)
Khan Academy...fantastic!!! well understood.Brief and easy to understand. Many Thanks
gala clouds (2 years ago)
thanks a lot
Lam Choi-Chuen Bernard (2 years ago)
thank you
Amlesh Soni (2 years ago)
kindly do upload more videos on derivatives
Arjun Amitra Jyoti (2 years ago)
Beautifully explained bro
divij kumar (2 years ago)
what software or what programme is used in above video .,, I too want to use it for presentations in my colg
Bryan Vallerte (2 years ago)
Saksham Gupta (2 years ago)
great job sir,,thanx
AntiTroll101 (2 years ago)
i have a question: don't bonds have floating interest rates that change based on LIBOR + previous cycle interest rates? so wouldn't the coupon not necessarily be $50 every month?
Trulee Y (2 years ago)
So companies can sell equity that they actually don't have? Where would the $5m come from and how would they get people to buy shares on it?
varun pahwa (2 years ago)
superb sir
Stella Toweett (3 years ago)
Balram Trivedi (2 years ago)
Bonds are basically just loans that can be traded on the market. Summarised the whole video for yah. ;)
Bobby Wapap (2 years ago)
how would they pay back?
Justin Walker (3 years ago)
That was!... That.. Was... That was a pretty good! A.. Pretty.. Good.. A pretty good... Video!... Video... Vi.. De.. O.. Video
David (6 months ago)
He's prob...probably...laugh....laughing....t...to...the....the...ba...bank...bank.
Bibek Gautam (2 years ago)
OMG! Thanks for aiding to my PIVD induced leg pain...HAHAHHAA
eziel domingues (3 years ago)
Exactly, create 500 shares out of nothing???How can that be possible?
Sunder Ma (3 years ago)
David Lewis (3 years ago)
How can you issue new shares without diluting the other shares?
Jerry Robinson (10 months ago)
David Lewis when the company issued the new shares, the share amount jumped to 1.5 instead of 1 million shares. Therefore, they were diluted
Zahuruddin Sheikh (1 year ago)
when you calculate the profits happened for that financial year, last year your asset including profit would be 50 billion dollars and this financial year calculating the launches and profits made from it the profit goes up and its 90 billion dollar, suddenly jeff Bezos is the richest man on eart, stock prices go up now ppl are buying it all over, tommorow someone tweeted something bad abt the company and the reputation dropped and ppl were afraid that customers wont buy anymore frm this company lets sell this stock, the entire process happens in reverse, now the asset goes down and stock value goes down also! BOOM jeff is no more the richest man in the world!
Skyclad Crown (2 years ago)
In the case of shares, you are either selling shares held by the company to create liquid assets or selling new shares to buy additional equity and therefore increase company asset value, ideally equal to the new shares created, not changing the price per share.
Piotr Drużkowski (2 years ago)
+David Lewis Because you're increasing the amount of assets aswell.
eziel domingues (3 years ago)
+David Lewis I see, dosent make any sense! Very confused video badly  explained!
asad ali khan (3 years ago)
you are one awesome khan !
fleshcookie (4 years ago)
So every 6 months you have to pay out 25k? seems risky
RealBlackDragon J_Lee (2 months ago)
fleshcookie wut
Christian Bottome (4 years ago)
theres something i don't understand: what happens if you buy a countries bond a the country goes default on year lets say 2016 but bond mature at year 2020 and the country recovers from default by that time will the country pay the loan or since it went on default on the period from when you bought the bonds to age of maturity then it won't pay ? im liking the Venezuela bonds 
Danilo (4 years ago)
Thank you Mr.Khan, your videos are the primary reason why I am surviving college
tiestofalljays (4 years ago)
The name is Bond, James Bond.
Siti Ibrahim (4 years ago)
Hi, what sort of a gadget did you use to produce a video like this? Is it some sort of a writing tool?
Zoonova.com (4 years ago)
Great video. If you want to actually use Bond analytics for pricing Bonds, or learning how to use bond analytics, see Zoonova.com. Freemium web app.
Richaun Facey (4 years ago)
you are a very good teacher, made this very simple to understand.
Dheerendra Mehar (4 years ago)
thank you,very well explained
David Trinh (4 years ago)
the best clearest video out there. most introduction videos dont even tell you how much you receive as the holder of the bond and just segue into a flurry of complicated information. more videos need to take it step by step like this and explain exactly how each entity of the party makes money and the reasons behind it. well done
carnevil09 (5 years ago)
You the man!
Brandon Waters (5 years ago)
thanks for the bonds for dummies (me being the dummy) 
CollegeInShorts (5 years ago)
You do not take into account share price dillusion for issuing new shares???
XXXDEADHEAD (5 years ago)
Company can sometimes buy back the bonds when market rates are low and re-issue (in a sense they can refinance the loan)
Rey Ponce (5 years ago)
ok, i see now what this means = i can control the universe with this "interest"
unkown101 (5 years ago)
but that means that the first million shareholders get less money because there are 500k extra shareholders.
Boljarin (5 years ago)
So the 500k is kinda like a kickstarter? "We're going to collectively give you 500k to invest in the new factory?". Or would the owner just raise the shares without specifying why?

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