Bonds are essentially loan proof.
Instead of going to a bank, the bond issuer earns funds by selling bonds to customers.
The issuer pays interest at regular intervals (usually annually or semiannually) and repays the principal on the maturity date, bringing the loan to an end.
Corporates, municipalities, and governments typically sell bonds to collect funds.
A bond includes all of the information about a loan, including the borrower, issuer, sum, interest rate, maturity date, and a few other data.
Various kinds of debt funds invest in various types of bond documents.
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