A bond is a trade-able financial instrument. A company or government can issue bonds to raise money from investors. The investor in turn earns an interest on the investment and the principal on maturity. Simply put, bonds are a receipt for a loan taken by a borrower from the investor for a fixed tenure. Bonds or debentures are one of the oldest and simplest of financial instruments. The bond market is the largest financial market in the world with around $123 trillion current outstanding bonds. To put that number in perspective, the combined equity market capitalisation is around $106 trillion. The bond market is also larger than the equity market with yearly issuance of new bonds is almost 35 times more than that of new equities.
Written by Yubi SupportUpdated over a week ago