Understanding Bonds: A Foundation for Stable Investment
What are Bonds? A bond is a fixed-income investment wherein people lend money to governments or corporations at a fixed interest rate for a specified period. In return, the issuer is obligated to repay the principal amount along with interest. Various entities, including companies and governments, actively use bonds to fund projects and operations. Bondholders are recognized as creditors and are entitled to repayment on a specified maturity date, along with interest payments dictated by the bond agreement, whether they are variable or fixed. Characteristics of Bonds Face Value (Par Value ): The amount a bond is worth at maturity, used to calculate interest payments. Coupon Rate : The interest rate that is paid on the face value, expressed as a percentage. Coupon Dates : The dates at which the interest payments are made to bondholders. Maturity Date : The date at which the bond matures, when the issuer pays...