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A bond is issued by a government or company as a way of borrowing money.  Investors buy the bonds, and receive an interest payment on the fixed dates, at the stated interest rate, or ‘coupon.’  The bond has a known maturity date, at which the investors are entitled to be repaid the money lent via the bond.  It is possible that at maturity date the company or government cannot repay the bond or is unable to pay the coupons: .this is the main risk associated with owning a bond.  Bonds can usually be bought and sold like shares, but if you sell or buy a bond before maturity it may have a different value than the initial amount loaned, which can give rise to a capital gain or loss. 

Wealth Know How is the online network helping people manage their wealth through financial education. Whether you are looking for simple ways to better manage your cash, or you are after a complete strategy on how to save for retirement, we can help you understand your options. It is important to have a vision for your future, but its knowledge not dreams that will ultimately deliver financial success.

Published on 11 Aug 14

  • A bond is issued by a government or company as a way of borrowing money.  Investors buy the bonds, and receive an interest payment on the fixed dates, at the stated interest rate, or ‘coupon.’  The bond has a known maturity date, at which the investors are entitled to be repaid the money lent via the bond.  It is possible that at maturity date the company or government cannot repay the bond or is unable to pay the coupons: .this is the main risk associated with owning a bond.  Bonds can usually be bought and sold like shares, but if you sell or buy a bond before maturity it may have a different value than the initial amount loaned, which can give rise to a capital gain or loss. 

    Wealth Know How is the online network helping people manage their wealth through financial education. Whether you are looking for simple ways to better manage your cash, or you are after a complete strategy on how to save for retirement, we can help you understand your options. It is important to have a vision for your future, but its knowledge not dreams that will ultimately deliver financial success.

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