A: A Bond is a loan taken out by a company. But instead of the company going to the bank to ask for a loan, it gets the money from investors who buy its bonds. It can be a contract between two companies or governments and it usually involves a large amount of money.
Bonds have what is called a maturity date which means that at some point, the bond issuer (the company or the government) has to pay back the money to the bond holder or investor. The pre-determined interest rate on the bond is usually paid annually. Investors buy bonds instead of stock sometimes because bonds provide a predictable income stream and are not as volatile as stock holdings.
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