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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 MatchesMoral obligation bondMoral obligation bondA tax-exempt bond issued by a municipality or a state financial intermediary that is backed by the moral, but not legal, obligation of a state government to appropriate funds in case of default . Insured bondInsured bondA municipal bond backed both by the credit of the municipal issuer and by commercial insurance policies. Lehman Brothers Municipal Bond IndexLehman Brothers Municipal Bond IndexA benchmark index that includes investment-grade, tax-exempt, and fixed-rate bonds with long-term maturities (greater than two years) selected from issues larger than $50 million. Completion bondingCompletion bondingInsurance that a construction contract will be completed successfully. Series EE bondSeries EE bondSee: Savings bond Further SuggestionsZ bondSushi bond Treasury bonds Super sinker bond Mortgage Bonds Positive covenant (of a bond) TAC bonds Shogun bond income bond baby bond municipal bond Reorganization bond Discount bond Bond premium Samurai bond Senior mortgage bond Salomon Brothers Non US Dollar World Government Bond Index Bearer bond Special bond account Equity linked Eurobonds PAC Bond Series E bond Inactive stock or bond Bond crowd Domestic bonds |
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