Bonds and Stocks

In finance, a bond is a debt security, in which the issuer owes the holders a debt and is obliged to repay the principal and interest (the coupon). Other stipulations may also be attached to the bond issue, such as the obligation for the issuer to provide certain information to the bond holder, or limitations on the behavior of the issuer. Bonds are generally issued for a fixed term (the maturity) longer than one year. - Municipal Bonds , Investment Banking , Tax-Exempt.

A bond is just a loan, but in the form of a security, although terminology used is rather different. The issuer is equivalent to the borrower, the bond holder to the lender and the coupon to the interest. Bonds enable the issuer to finance long-term investments with external funds.

Debt securities with a maturity shorter than one year are typically bills. Italia Search. Certificate of deposit or commercial paper are considered money market instruments.

Traditionally, the U. S. Treasury uses the word bond only for their issues with a maturity longer than ten years, and calls issues between one and ten year notes. Browse through the site and check out all of the Investing resources, photos, news and more. Elsewhere in the market this distinction has disappeared, and both bonds and notes are used irrespective of the maturity.