A bond is a debt security, similar to an I.O.U. When you purchase a bond, you are lending money to a government, municipality,
corporation or other entity known as the issuer. In return for the loan, the issuer promises to pay you a specified rate of
interest during the life of the bond and to repay the face value of the bond (the principal) when it “matures,”
or comes due.
Among the types of bonds you can choose from are: government bonds, municipal bonds, corporate bonds, or mortgage and asset—backed
securities.
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