A bond is a fixed income investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate.
 | | Bond | | A bond is a fixed income investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period of time at a variable or fixed interest rate. Bonds are used by companies, municipalities, states and sovereign governments to raise money and finance a variety of projects and activities. Owners of bonds are debtholders, or creditors, of the issuer. | | Breaking it Down: | | Bonds are commonly referred to as fixed-income securities and are one of the three main generic asset classes, along with... | | Read More » | | Coupon Rate | | Coupon rate is the yield paid by a fixed income security, which is the annual coupon payments paid by the issuer relative to the bond's face or par value. | | Read More » | | | Bond Discount | | Bond discount is the amount by which the market price of a bond is lower than its principal amount due at maturity. This amount, called its par value, is often $1,000. | | Read More » | | |  | | | | CONNECT WITH INVESTOPEDIA | | | | | | | |
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