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What are bonds & how do they work?

What Are Bonds? Bonds are investment securities where an investor lends money to a company or a government for a set period of time, in exchange for regular interest payments. Once the bond reaches maturity, the bond issuer returns the investor’s money.

What are bonds used for?

Bonds are debt instruments and represent loans made to the issuer. Bonds allow individual investors to assume the role of the lender. Governments and corporations commonly use bonds to borrow money to fund roads, schools, dams, or other infrastructure.

What are bond details?

Bond details include the end date when the principal of the loan is due to be paid to the bond owner and usually include the terms for variable or fixed interest payments made by the borrower. A bond is referred to as a fixed-income instrument since bonds traditionally pay a fixed interest rate or coupon to debtholders.

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