Hello friends, myself Laxman, today in this article we see what is the bond in the stock market and also its advantage and disadvantage. How we make money from it. What is the function?
let’s see in step by step:
Bond is the financial instrument and also called the IOU. Bond is printed on fancy paper with a doodle around the border and the artwork at the top, but its purpose is the pure as the IOU purpose.
it’s is the record of that fact you have loaned money to someone else. It shows the amount of the loan and the deadline for that for paying it back. It gives an interest rate that the borrower has to pay. (What is the Bond in Stock Market)
When you buy a bond. it means you are not purchasing anything. you are simply making a loan. The seller of the bond is also called the issuer, is buying your money, and bond is the also prove that the deal has happened.
When you buy the bond first of all research that issuer(or company) to have the ability to pay the return our money.
The higher risk of bonds is also called junk bonds. They have the ability to lose your all money. this is about junk bonds we see in the preferred bonds article. (What is the Bond in Stock Market)
This is all about the What is the bond, its advantage, and disadvantage.
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