Bonds are fixed income securities from "summary" of Loose Leaf Finance with Connect Access Card by Troy Adair,Marcia Millon Cornett,John Nofsinger
Bonds are investments issued by corporations, municipalities, or the federal government. When an investor purchases a bond, they are essentially lending money to the issuer in exchange for periodic interest payments and the return of the bond's face value at maturity. Unlike stocks, which represent ownership in a company and offer the potential for capital gains, bonds provide a fixed stream of income in the form of interest payments. This fixed income feature makes bonds attractive to investors seeking a predictable cash flow. The interest rate on a bond, known as the coupon rate, is typically fixed at the time of issuance. This means that investors can rely on a consistent income stream throughout the life of the bond. Additionally, the face va...
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