Bond (finance)
A bond is a contract between two parties (companies or government.)
Companies or governments issue bonds because they need to borrow large amounts of money. They issue bonds and investors buy them (so giving money to the people who issued the bond).
Bonds have a maturity date. This means that at some point, the bond issuer has to pay back the money to the investors. They also have to pay the investors a bit more than they paid for the bond. Bonds are used when needed to keep the company running smoothly. It is protection if their stock drops drastically.
Bonds are usually traded through banks and other financial entities and are part of a financial instrument group called Fixed Income. Banks and financial institutions offer loans on different terms against the security of assets.
Simply put, a bond is a receipt given by a government or organization as an agreement to borrow money from another organization which will be returned at a later date with certain amount of interest or increment.
Bond (finance) Media
- 1978 $1000 8 3-8% Treasury Bond (reverse).jpg
1978 $1,000 U.S. Treasury bond
- Vereinigte Ostindische Compagnie bond - Middelburg - Amsterdam - 1622.jpg
Bond issued by the Dutch East India Company in 1623
- South Carolina consolidation bond.jpg
Bond certificate for the state of South Carolina issued in 1873 under the state's Consolidation Act
- Obligatie-Moskau-Kiev-Woronesch.jpg
Railroad obligation of the Moscow-Kiev-Voronezh railroad company, printed in Russian, Dutch and German
Pacific Railroad bond issued by City and County of San Francisco, California, May 1, 1865
Receipt for temporary bonds issued by the state of Kansas in 1922
- Kansas Waterworks & Irrigation Company 1889.jpg
Fixed rate gold bond with semi-annual coupons of the Kansas Waterworks & Irrigation Company, issued 8 April 1889
- New York Central and Hudson River RR 1917.jpg
Registered bond of the New York Central and Hudson River Railroad Company issued April 10, 1917
