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  Tuesday November 21, 2017

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SOME BOND BASICS
Learn even more about this topic with the Encyclopedia of Personal Finance™

Bonds are debt securities. They represent money that is borrowed from investors to finance operations and projects.

Unlike stocks, which represent shares of ownership in a company, bonds represent money owed to their holders. When you buy a bond, you become a lender.

Most pay fixed rates of interest. A few pay variable rates that change with the market. Bonds are issued with a face value or par. They also have a specified maturity date, which is the date the issuer repays the principal. Bonds can take from one to fifty years to mature. Until they mature, the bond issuer makes interest payments semi-annually, quarterly, or monthly.

Investors can buy bonds directly or as part of a mutual fund. A bond fund buys bonds, and investors buy shares in the fund itself.

Now that we've reviewed the basics of bonds, let's learn what bond mutual funds are.




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