In general, a benchmark is a way to judge the performance of an investment (See: Benchmark). The basic idea: you can't tell how well something performed until you compare it to the general market, or to some other relevant marker of performance.
A benchmark bond applies specifically to the bond market. In the stock market, common benchmarks include stock indices, like the S&P 500. For bonds, a common benchmark is the 10-year U.S. Treasury. This provides a baseline for how your bond investment performed.
Once you identify an appropriate benchmark, you can ask relevant questions about the performance of your investment.
Things like:
Did it do better or worse than the benchmark? Did you get enough return to take extra risk? Did you waste your life going into finance, when you don't care at all about bond speculation and you spend all my time thinking about that screenplay you started in college? Actually, we're not sure how much a benchmark would help this last one; maybe if your performance is good enough vs. the benchmark, you'll forget about Hollywood and get back to investing.
Related or Semi-related Video
Finance: What are lenders?27 Views
finance a la shmoop what are lenders is that a bagel company hmm okay well maybe
it doesn't matter here lenders are the people and institutions
and countries who loan money banks are lenders they loan money for small [woman walks into bank]
business for big business and well everything in between
banks are big lenders they generally focus on large amounts for big
corporations and take their spread then you have savings and loans well they're
smaller more intimate local cousins of the banks and they focus on local loans
like your local flower shop needs 25 grand in credit but lenders also sell a [flowers in a store]
special kind of loan a mortgage for when you want to buy a home and the interest
on mortgages is distinctively tax-deductible your big brother can also
be a lender that hundred bucks he loaned you yeah is not like the hundred that [sister approaches big brother]
grandmama quote loaned you unquote ie Big Brother's long does not just get
naturally forgotten his alone carries interest in newgy penalties when it's [fist appears as sister smiles]
not paid back to lenders it's people who loan money lending loaning got in there
kind of related [sister being nuggied]
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