Bonds..
February 17, 08 by FinanceTurfBond is a debt security, similar to a debenture.
When we purchase a bond, we are lending money to a government, municipality, corporation or other entity known as the issuer.
In return for the loan, the issuer promises to pays a specified rate of interest during the life of the bond and to repay the face value of the bond (the principal) when it “matures,” or comes due.
Bond, like debenture, is an acknowledgement of debt issued under the seal of a company and signed by an authorized signatory.
The expression ‘Bond’ has become synonymous with the debt instruments where the rate of interest is not pre-determined. Examples of bonds are Deep Discount Bond, Zero Coupon Bond etc.
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