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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. Lehman Brothers New York Municipal Bond IndexLehman Brothers New York Municipal Bond IndexA benchmark index that includes investment-grade, tax-exempt, and fixed-rate bonds issued in the state of New York. All securities have long-term maturities (greater than two years) and are selected from issues larger than $50 million. Accrual bondAccrual bondA bond on which interest accrues but is not paid to the investor during the time of accrual. The amount of accrued interest is added to the remaining principal of the bond and is paid at maturity. Unlimited tax bondUnlimited tax bondA municipal bond secured by the pledge to levy taxes until full repayment at an unlimited rate. Subordinated debenture bondSubordinated debenture bondAn unsecured bond that ranks after secured debt, after debenture bonds, and often after some general creditors in its claim on assets and earnings. Related: Debenture bond, mortgage bond, collateral trust bonds. Further SuggestionsPassive bondDollar price of a bond general obligation bond Special assessment bond Prerefunded bond Death backed bonds Global bonds Senior mortgage bond Discount bond bond mutual fund Perpetual bond Optional payment bond Consolidated mortgage bond municipal bond Citizen bonds Automated bond system (ABS) Low coupon bond refunding Lehman Brothers Corporate Bond Index perpetual bond secured bond Prior lien bond granny bonds Unamortized bond discount Indexed bond Eurobond |
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