Performance bond

Definition

A surety bond between two parties, insuring one party against loss if the terms of a contract are not fulfilled. Usually part of a construction contract or supply agreement.

Investing Essentials

Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University


Term of the Day

Overwriting
A speculative option strategy that involves selling call or put options on stocks that are believed to be overpriced or underpriced; the options are expected not to be exercised.

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