MANAGEMENT

Detailed explanation-1: -A bond is a debt obligation, like an IOU. Investors who buy corporate bonds are lending money to the company issuing the bond. In return, the company makes a legal commitment to pay interest on the principal and, in most cases, to return the principal when the bond comes due, or matures.

Detailed explanation-2: -A bond is a debt security, similar to an IOU. Borrowers issue bonds to raise money from investors willing to lend them money for a certain amount of time. When you buy a bond, you are lending to the issuer, which may be a government, municipality, or corporation.

Detailed explanation-3: -Bond Example A bond represents a promise by a borrower to pay a lender their principal and usually interest on a loan. Bonds are issued by governments, municipalities, and corporations.

Detailed explanation-4: -Bonds are technically a form of IOU, whereby an individual loans an amount of money to a company or government and is given a contract promising to repay the money with interest by a certain date. Whilst this agreement is sometimes referred to as an “IOU”, it is in fact legally binding.