Bonds
Bonds: Otherwise known as fixed-interest
securities, bonds are basically IOUs which are issued
by governments, financial institutions and companies.
Generally, the issuer undertakes to pay investors a
fixed rate of interest for a fixed number of years (e.g.
7% for 5 years). The fact that the interest rate is
fixed makes bonds attractive because their return is
so predictable. Bonds are traded in open markets, in
the same way as shares. (See also Gilts)
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