Normally, the idea of bond comes up with the purpose of raising money from banks or other governmental organizations. Buying a bond means you are giving a loan to the bank, and they are bound to pay back the value of the bond at some specific time. This is also a type of trade.
Corporate bonds are somehow similar but also have some major differences. Let’s check what a corporate bond is?
A corporate bond is a kind of loan. The person who is buying the bond is lending an amount to the firm issuing the bond. The company is then committed legally to pay interest to the buyer. After the due date, the bond matures, and the amount is returned to the investor. The interest rate is fixed in some cases and variable in others. A firm issues corporate bonds to raise its money, and the investors buy them to receive a set of timely interest payments. Corporate bonds are a direct link between investors and firms, but this type of trading also occurs in the secondary market.
In addition to their strong returns, corporate bonds have many other benefits that attract the investors towards them, such as:
Although trading in corporate bonds is less risky, it is not free-of-risks at all. Here are some pieces of evidence:
Corporate bonds offer a lot of variety and options. So it has multiple types on the basis of different terms.
Corporate bonds are highly structured bonds. They include some flaws, but they are very unique and occasional. Now we want to enlist some corporate bonds for sale.
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