Resources ❯ Accounting Terms

Short Bond

[short bond]

What is the definition of Short Bond?

A bond with a short maturity period, typically defined as two years or less.

Using Short Bond in an Example

In a strategy to manage interest rate risk, an investor might choose to purchase short bonds, which are less sensitive to interest rate changes compared to bonds with longer maturities.

Using Short Bond in a sentence

The portfolio manager recommended increasing our holdings in short bonds to enhance liquidity and reduce exposure to volatile markets.

Related Terms

Surviving Spouse

A person whose spouse has died within the tax year and who may file a joint tax return for that year. Additionally, the surviving spouse can file joint returns for the next two years if they remain unmarried and maintain a household as the principal residence for a dependent child.

Swap

A financial contract in which two parties agree to exchange streams of payments over a specified period, based on different indices such as interest rates, foreign exchange rates, or equity indices, applied to a notional amount. Swaps typically do not involve the exchange of principal.

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