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BondA debt instrument, issued by a borrower and promising a specified stream of payments to the purchaser, usually regular interest payments plus a final repayment of principal. Bonds are exchanged on open markets including, in the absence of capital controls, internationally, providing a mechanism for international capital mobility.BondThe generic name for a tradable loan security issued by governments and companies as a means of raising capital.The bond guarantees its holder:repayment of capital at a future specified date (the maturity date)a fixed rate of interest (also known as the coupon)Government bonds are known as gilts or Treasury Stock.Bonds offer certainty of income, but may fail to keep pace with inflation.As far as the capital is concerned, you only know exactly how much your bond is worth if you plan to hold it to maturity (when you will be paid back the face value). But in the time between issue and maturity, a bond's value can be as volatile as a share, and if you plan to sell before maturity you run the risk of capital erosion. In general:Bond prices fall when bank interest rates go up (because the interest rate rise attracts money out of bonds into cash)Fear of rising inflation will cause bond prices to fall, because investors worry that bonds will not bring enough income to keep pace with inflationThe German and American bond markets have an effect on UK bond prices, because they are competing for the same institutional capital.Similar MatchesIndustrial revenue bond (IRB)Industrial revenue bond (IRB)A bond issued by local government agencies on behalf of corporations. Treasury bondsTreasury bondsDebt obligations of the US Treasury that have maturities of 10 years or more. Essential purpose (or function) bondEssential purpose (or function) bondSee: Public purpose bond Municipal bond insuranceMunicipal bond insuranceIn the US, an insurance policy which guarantees a mutual bond in the case of default, issued by private insurers. Baby bondBaby bondA bond with a par value of less than $1000. Further SuggestionsMunicipal revenue bondBrady bond Bond rating Passive bond Gold bond Commodity backed bond bond interest yield Split coupon bond Tax exempt bond Taxable municipal bond Bond indenture Bond of Indemnity secured bond Single payment bond guaranteed income bond Bond Buyers municipal bond index Combination bond Parallel bonds Term bonds Revenue bond Short bonds Corporate bonds Long bonds Cross border bonds Indexed bond |
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