Bonds - Debt securities which generally entitle the holder to a fixed-rate of interest during their life and repayment of the amount of the bond at maturity.
otherwise known as fixed-interest securities, bonds are basically IOUs which are issued by governments, financial institutions and companies. Generally, the issuer undertakes to pay investors a fixed rate of interest for a fixed number of years (e.g. 7% for 5 years). The fact that the interest rate is fixed makes bonds attractive because their return is so predictable. Bonds are traded in open markets, in the same way as shares. (See also Gilts)
Bonds : debt securities which generally entitle the holder to a fixed-rate of interest during their life and repayment of the amount of the bond at maturity.
otherwise known as fixed-interest securities, bonds are basically ious which are issued by governments, financial institutions and companies. generally, the issuer undertakes to pay investors a fixed rate of interest for a fixed number of years (e.g. 7% for 5 years). the fact that the interest rate is fixed makes bonds attractive because their return is so predictable. bonds are traded in open markets, in the same way as shares. (see also gilts)
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