What a bond is
Understand why bond vs stock: Bond = you are the lender (creditor).
In this lesson
What a bond is is part of Stocks and Bonds Basics. This preview shows how investment-universe connects to everyday family decisions such as earning, saving, spending choices, goals, approvals, or parent-guided money conversations inside Progress Penguin.
Think about this money choice
Imagine this situation: You buy a 100000 in local currency FGN bond at 12% annual interest, 3-year term.
How it works
Bond vs stock: Bond = you are the lender (creditor). Company or government owes you principal + interest. Predictable returns. Stock = you are the owner (equity). Returns depend on company performance. Bonds are priority claims; stocks are residual claims. Lower risk (bonds) = lower return potential.
Apply it to a real decision
Real-life money moment: You buy a 100000 in local currency FGN bond at 12% annual interest, 3-year term. What do you receive over 3 years and at maturity? The key lesson is: Bond mechanics: coupon payments (12,000/year) paid periodically (usually semi-annually in practice), then principal (100,000) returned at maturity.
Activity preview
Connect the ideas
Use the lesson to complete this short practice activity.
Try one real money action
Open Tasks and submit proof for one task, or open Requests and make a deposit request. Parent approval can happen later.
Quiz preview
Buying a bond means:
You buy a 100000 in local currency FGN bond at 12% annual interest, 3-year term. What do you receive over 3 years and at maturity?