Updated: Sep 11, 2018
This post defines what is a Bond and Bond Funds
What is a Bond?
A bond is a debt instrument issued by governments and companies to raise required financing. A bond is an agreement where an investor lends money for a definite period, in return for periodic interest/coupon payments and the original amount paid back at the expiration of the period. The larger the risk associated with the entity borrowing the funds, the larger will be the compensation for the investor in the form of interest/coupon payments.