| Bunny Bond | |
 A type of bond that offers investors the option to re-invest coupon payments back into additional bonds with the same coupon and maturity. Also known as "multiplier bond" or "guaranteed coupon reinvestment bond." |
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 Bunny bonds offer an effective method to protect against reinvestment risk, which arises from the possibility of future interest rates dropping. With a normal bond, when a coupon is paid, investors are exposed to the risk of having to reinvest their coupons at a lower interest rate. If an investor chooses to re-invest all cash coupons back into the bond he or she is currently holding, it behaves similarly to a zero-coupon bond because there are be no cash flows until maturity. |
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 Bond Basics Tutorial - What are bonds and do they belong in your portfolio? Get all the answers in this comprehensive tutorial. Advanced Bond Concepts - This detailed tutorial explains some of the more complex concepts and calculations you need to know for trading bonds, including bond pricing, yield, term structure of interest rates, duration, and much more. |
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