Bond market index

Think about the bond market as a big group of different types of loans that people and businesses can take out. An index is like a big list that keeps track of all of the loans in the bond market.

A bond market index takes that list and groups together similar types of loans. For example, all of the loans made to big companies might be put in one group, while loans made to smaller companies might be put in another. This helps people who want to invest in the bond market to understand how loans are doing based on different groups.

The index might also assign a number to each group, kind of like how you might give friends different numbers based on how much you like them. The higher the number, the better the loans in that group are doing.

Overall, the bond market index helps people keep track of lots of different loans at once and figure out which ones might be good to invest in.