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Class mate one we need to reply to her post Chlse
According to Investopedia bonds are “A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate” (Bond, n.d.). Bonds can be taken out to fund projects, and are considered an asset along with cash and stocks, which makes them a fixed-income security (Bond, n.d.). Due to a bond being an investment, there is no guarantee on the amount that will be earned, or if the money will be lost (Bond Investment Strategies, n.d.). This means that like with any investment, there are risks.
Bonds can be purchased by anyone, but can only be taken out on large corporations or government entities (Bond Investing Basics, n.d.). They are a way for these groups to gather large sums of money to help fund their expansion, projects, or run their day to day operation (Bond Investing Basics, n.d.). There is usually a specific period of time that someone who purchases a bond will loan their money for, and it is determined by the company or government that the money is going to (Bond Investing Basics, n.d.). At the end of this period, the bond purchaser should receive their original investment, plus a certain percent earned from loaning the money (Bond Investing Basics, n.d.).