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What is Bonds
Bond is a debt security that reflects the debtor obligation of the issuer to the owner of the security.

Bond is a debt security that reflects the debtor obligation of the issuer to the owner of the security.

Bonds are divided according to maturity:

  • Short-term bonds - with a maturity shorter than one year; they are traded on the money market. These include:
    • Treasury bills
    • Commercial papers
    • Deposit Certificates
  • Medium and long-term bonds - with a maturity longer than one year; they are traded on the stock market. These include:

Forms of bonds:

Valuation of bonds is based on the principles of net present value.

Use of bonds in practice: Subject as an issuer can use the bonds to raise additional funds. On the other hand, bonds can be used as a financial investment, if we want to evaluate the available financial resources. Investing in bonds is a relatively safe type of investment.

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Last update: 26.09.2016

Comments

Rambo Nem 24 days

As the article states a bond is an obligation and bods can be issued by governments or public companies to raise money through financial markets.
CFD bond trading is one of vehicles to trade bonds but there are other options; through the stock exchanges or you can buy government bonds directly.

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