The National Directory of Certified Public Accountants

Ask A CPA - Investments & Financial Planning

What Is A Bond ?

A Bond is a security that represents a loan from the purchaser of the bond to the issuing organization. The Organization may be a private company or a federal, state or local government. Bondholders receive a specific amount of interest on a regular basis and the return of their loan principal at the end of a stated period. A Bond provides a fixed amount of income. Its value will increase if interest rates fall and decrease if interest rates rise.

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