What Is a Bond?
A bond is a fixed-income instrument where an investor loans money to an issuer in exchange for regular interest payments and return of principal at maturity. Bonds are commonly used by governments, municipalities, and corporations to raise capital.
Types and Key Features
Common types include government, municipal, and corporate bonds. Key features include coupon rate, maturity date, credit rating, and yield. Investors often use bonds to diversify portfolios and manage interest-rate and credit risk.
How to Evaluate Bond Investments
Evaluate bonds by comparing yield to maturity, duration, and issuer credit quality. Higher yields often reflect higher risk. Investors can research bond details through financial data platforms and official issuer disclosures.
