Bond

A bond is a type of financial instrument that represents a loan made by an investor to a borrower. The borrower is usually a government, municipality, or corporation. The investor is the bondholder. The borrower is obligated to pay the bondholder periodic interest payments, as well as to repay the face value of the loan at maturity.

There are several kinds of bonds including a U.S. Treasury Bond (T-Bond), Fixed-Rate Bonds, Municipal Bonds and High Yield Bonds.