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    Describing a Bond

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    What is a bond? What are some features of a bond? How do you value bonds? What factors can affect that value?

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    What does bond 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.

    Bond Explained:

    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 ...

    Solution Summary

    This solution discusses bonds in detail.

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