Investment Glossary
Bond -
A bond is simply an IOU issued to an investor in exchange for a loan of money.
The company or government issues a bond stating that they promise to pay back
the borrowed money, plus interest, at a specified date (maturity date).
There is some risk involved in investing in bonds issued by smaller,
start-up companies, who may go bankrupt, however bonds issued by the
government or blue chip companies are
generally pretty safe investments. On the flip side, investing in riskier
start-up companies usually pay more interest (yield) than their safer
counterparts.
