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In finance, a bond is a type of security under which the issuer owes the holder a debt, and is obliged – depending on the terms – to provide cash flow to the creditor (e.g. repay the principal (i.e. amount borrowed) of the bond at the maturity date as well as interest (called the coupon) over a specified amount of time. [1])
A bond is a form of debt where the bond issuer borrows money in return for paying interest and returning the bond’s principal to the buyer when the bond matures. Bonds are commonly issued by ...
When you think about investing, your mind may automatically default to investing in stocks. But stocks are just one of many different asset classes investors have the opportunity to put their ...
In finance, a high-yield bond (non-investment-grade bond, speculative-grade bond, or junk bond) is a bond that is rated below investment grade by credit rating agencies. These bonds have a higher risk of default or other adverse credit events but offer higher yields than investment-grade bonds in order to compensate for the increased risk.
Buying bonds through mutual funds and ETFs: An easier option can be to invest in bond mutual funds or exchange-traded funds (ETFs). Rather than choosing individual bonds, you choose a fund that ...
The coupon (of a bond) is the annual interest that the issuer must pay, expressed as a percentage of the principal. The maturity is the end of the bond, the date that the issuer must return the principal. The issue is another term for the bond itself. The indenture, in some cases, is the contract that states all of the terms of the bond.
When the bond matures at the end of the period, the issuer repays the bond’s principal to the bondholder. A bond is one way to finance a business and it’s a type of debt security.
A government bond or sovereign bond is a form of bond issued by a government to support public spending. It generally includes a commitment to pay periodic interest , called coupon payments , and to repay the face value on the maturity date.