Recently, I found some old notes that I have summarized from various sources I have read on bond investment 6-7 years ago. These notes are more detail than the earlier articles that I have written on US Corporate Bonds Investment in my blog and I found these notes helpful for better understanding . These notes are applicable for all types of bonds investment. I will be sharing these notes in the next few articles on bonds investment.
WHAT ARE BONDS?
A bond is a debt security, similar to an I.O.U. When you purchase a bond, you are lending money to a government, municipality, corporation, federal agency or other entity known as the issuer. In return for the loan, the issuer promises to pay you a specified rate of interest during the life of the bond and to repay the face value of the bond (the principal) when it “matures,” or comes due.
Among...