What's a bond? (2024)

All else being equal, a bond with a longer maturity usually will pay a higher interest rate than a shorter-term bond. For example, 30-year Treasury bonds often pay a full percentage point or two more interest than five-year Treasury notes.

The reason: A longer-term bond carries greater risk that higher inflation could reduce the value of payments, as well as greater risk that higher overall interest rates could cause the bond's price to fall.

Bonds with maturities of one to 10 years are sufficient for most long-term investors. They yield more than shorter-term bonds and are less volatile than longer-term issues.

What's a bond? (2024)

FAQs

How to answer for bond? ›

Answer 2: "Will you Work Under a Bond of 2 Years?" Sure, Sir, I'm willing to sign the bond if I'm having everything I've been waiting for in a dream job and if you think I'm the best choice for this role. You can depend on my participation.

How do you explain what a bond is? ›

Bonds are investment securities where an investor lends money to a company or a government for a set period of time, in exchange for regular interest payments. Once the bond reaches maturity, the bond issuer returns the investor's money.

What is a bond quizlet? ›

A bond is a fixed income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental)

What is a good bond? ›

U.S. Treasury bonds are considered one of the safest, if not the safest, investments in the world. For all intents and purposes, they are considered to be risk-free. (

What is a good example of a bond? ›

For example, if a company wants to build a new plant, it may issue bonds and pay a stated rate of interest to investors until the bond matures. The company also repays the original principal. Unlike buying stock in a company, buying a corporate bond does not give you ownership in the company.

What is a good sentence for bond? ›

Examples from Collins dictionaries

The experience created a very special bond between us. Belinda was having difficulty bonding with the baby. They all bonded while writing graffiti together. What had bonded them instantly and so completely was their similar background.

What is bond for dummies? ›

The people who purchase a bond receive interest payments during the bond's term (or for as long as they hold the bond) at the bond's stated interest rate. When the bond matures (the term of the bond expires), the company pays back the bondholder the bond's face value.

What is the meaning of in bond? ›

The in-bond process allows imported merchandise to be entered at one U.S. port of entry without appraisem*nt or payment of duties and transported by a bonded carrier to another U.S. port of entry or other authorized destination provided all statutory and regulatory conditions are met.

How do I identify a bond? ›

One way to predict the type of bond that forms between two elements is to consider whether each element is a metal or nonmetal. In general, covalent bonds form between nonmetals, ionic bonds form between metals and nonmetals, and metallic bonds form between metals. Created by Sal Khan.

What describes bonds? ›

A bond is a fixed-income instrument and investment product where individuals lend money to a government or company at a certain interest rate for an amount of time. The entity repays individuals with interest in addition to the original face value of the bond.

What best describes what a bond is? ›

Bonds are loans that investors make to a corporation or a government body in exchange for regular interest payments and the return of principal at a future date. Companies issue corporate bonds to raise money for capital expenditures, operations and acquisitions.

What term is a bond? ›

The term of the bond is the amount of time between bond issuance and bond maturity. On the maturity date of a term bond, the bond's face value, the principal amount, must be repaid to the bondholder.

What is the definition of a bond? ›

Bonds are a kind of debt instrument and are majorly issued by governments and corporations to borrow money. The raised fund is then utilized for multiple objectives that may include buying property and equipment, running new projects, research and development, etc.

How do bonds work? ›

Bonds are an investment product where you agree to lend your money to a government or company at an agreed interest rate for a certain amount of time. In return, the government or company agrees to pay you interest for a certain amount of time in addition to the original face value of the bond.

What is a bond best defined as? ›

Bonds are issued by governments and corporations when they want to raise money. By buying a bond, you're giving the issuer a loan, and they agree to pay you back the face value of the loan on a specific date, and to pay you periodic interest payments along the way, usually twice a year.

What is the bond order answer? ›

Bond order is the number of chemical bonds between a pair of atoms and indicates the stability of a bond. For example, in diatomic nitrogen, N≡N, the bond order is 3; in acetylene, H−C≡C−H, the carbon-carbon bond order is also 3, and the C−H bond order is 1.

What is the best way to describe a bond? ›

Bonds are issued by governments and corporations when they want to raise money. By buying a bond, you're giving the issuer a loan, and they agree to pay you back the face value of the loan on a specific date, and to pay you periodic interest payments along the way, usually twice a year.

How do you solve for bond order? ›

Bond Order = (Number of bonding electrons - number of antibonding electrons) /2. The answer gives the bond order.

How do you determine a bond? ›

Identifying Types of Bonds
  1. Look at the chemical formula.
  2. Identify the elements in the compound.
  3. Determine if the elements are metals or nonmetals (using a periodic table)
  4. Metal – Metal = Metallic.
  5. Metal – Nonmetal = Ionic.
  6. Nonmetal -- Nonmetal = Covalent.

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