When you buy a bond, you are lending money to the issuer for a defined term. During that time, you receive periodic income known as coupon payments. Once the bond matures, the issuer repays the amount you initially invested. Bonds can also be traded in the market before maturity, and their prices may rise or fall based on interest rate movements and market demand.

• Bonds are debt instruments issued by governments or corporations to raise funds.

• Investors lend money to issuers in exchange for regular interest payments and eventual repayment of principal.

• Bonds are used to finance public projects, corporate expansion, or infrastructure.

• Key components include: face value, coupon rate, maturity date, and credit rating.

• Bond prices can fluctuate based on interest rates and issuer creditworthiness.