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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 MatchesSushi bondSushi bondA Eurobond issued by a Japanese corporation. Deep discount bondDeep discount bondA bond issued with a very low coupon or no coupon that sell at a price far below par value. A bond that has no coupon is called a zero-coupon bond. Baby bondBaby bondA bond with a par value of less than $1000. Stratified sampling bond indexingStratified sampling bond indexingA method of bond indexing that divides the index into cells, each cell representing a different characteristic, and that buys bonds to match those characteristics. Bond powerBond powerA form used in the transfer of registered bonds from one owner to a different owner. Further SuggestionsPickup bondIndustrial revenue bond (IRB) Special assessment bond Par bond guaranteed growth bond Eleven bond index Taxable municipal bond Special bond account Series EE bond serial bond Dollar price of a bond Pure discount bond Irredeemable bond Stripped bond income bond Lehman Brothers Municipal Bond Index Full coupon bond Global bonds Bond points Samurai bond Toll revenue bond US Treasury bond Savings bond performance bond Optional payment bond |
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