A bond is a type of financial asset that represents a loan made by an investor to a borrower, typically a company or a government. When an investor buys a bond, they are essentially lending money to the borrower in exchange for regular coupon payments and a promise to repay the initial amount (nominal) at a future date, known as the bond's maturity date.
Bonds come in different types and are typically issued with a fixed coupon rate, which is determined at the time of issuance. The coupon payments are usually made periodically, such as monthly or annually, and the …