Bond

What does it Mean? A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate. Bonds are used by companies, municipalities, states and U.S. and foreign governments to finance a variety of projects and activities.

Bonds are commonly referred to as fixed-income securities and are one of the three main asset classes, along with stocks and cash equivalents..
Investopedia Says... The indebted entity (issuer) issues a bond that states the interest rate (coupon) that will be paid and when the loaned funds (bond principal) are to be returned (maturity date). Interest on bonds is usually paid every six months (semi-annually). The main categories of bonds are corporate bonds, municipal bonds, and U.S. Treasury bonds, notes and bills, which are collectively referred to as simply "Treasuries".

Two features of a bond - credit quality and duration - are the principal determinants of a bond's interest rate. Bond maturities range from a 90-day Treasury bill to a 30-year government bond. Corporate and municipals are typically in the three to 10-year range.

Terms Related Links

Bond Ladder
Bond Rating
Bond Swap
Brady Bond
Callable Bond
Convertible Bond
Corporate bond
Coupon
Coupon Bond
Discount Bond
Eurobond
Housing Bonds
Indenture
Junk Bond
Maturity
Mello Roo's
Municipal bond
Obligor
Premium bond
Put Bond
Tax Anticipation Notes (TAN)
Treasury Bill
Treasury bond
Treasury note
Yield to Maturity
Zero-coupon bonds

Terms Related Links
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What does it mean when a bond has a put option?




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