Bonds are a form of fixed income instrument, which means they provide a fixed amount of return to the investor. They are essentially loans made to corporations or governments, with the promise of regular interest payments and repayment of the principal amount at a specified maturity date. The interest rate on a bond is determined by various factors, such as the creditworthiness of the issuer and prevailing market conditions. Bonds are commonly used by investors to diversify their portfolio and generate steady income.
