Bond
A security representing the debt of the company or government issuing it. When a company or government issues abond, it borrows money from the bondholders; it then uses the money to invest in its operations. In exchange, thebondholder receives the principal amount back on a maturity date stated in the indenture, which is the agreement governing a bond's terms. In addition, the bondholder usually has the right to receive coupons or payments on thebond's interest. Generally speaking, a bond is tradable though some, such as savings bonds, are not. The interest rates on Treasury securities are considered a benchmark for interest rates on other debt in the United States. The higher the interest rate on a bond is, the more risky it is likely to be.