A bond is essentially a loan from an investor to a borrower, such as a business or the government. The investor earns interest on the investment while the borrower utilizes the funds to support its activities. A bond’s market value may fluctuate over time.

One of the three primary asset classes, or groupings of comparable investments, that are often employed in investing in fixed-income instruments, which include bonds.

Bonds are a sort of fixed-income security since they function by returning a consistent sum to the investor, commonly referred to as a “coupon rate”.

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