Bonds are debt and are issued for a period of more than one year. The US government, local governments, water districts, companies and many other types of institutions sell bonds. When an investor buys bonds, he or she is lending money. The seller of the bond agrees to repay the principal amount of the loan at a specified time. Interest-bearing bonds pay interest periodically.
Nearby TermsBombay Stock Exchange (BSE) Bon voyage bonus Bond Bond agreement Bond anticipation note (BAN)
Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University