Bond Definition
A bond is a debt security in which the issuer owes the holder a debt and is obliged to pay periodic interest payments, known as coupons, and to repay the principal at maturity. The issuer may be a government, municipality, or corporation.
Bonds are used by companies, governments, and other entities to finance projects and operations. They are also traded in secondary markets. The yield on a bond represents the return an investor will receive if the bond is held to maturity, and takes into account the coupon rate, price of the bond, and time to maturity.
There are many different types of bonds including Treasury bonds, corporate bonds, municipal bonds, and more. Each type of bond has its own unique features and risks.
