How Do Bonds Work?
The issuer promises to pay the money back; governments, companies and other organizations issue bonds.
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1.What is a bond?
The issuer promises to pay the money back; governments, companies and other organizations issue bonds.
2.Which three numbers describe every bond?
The face value is repaid at the end, the coupon is the interest paid, and maturity is the end date.
3.A bond has a face value of 1,000 and a 3 percent coupon. How much interest does it pay each year?
Over ten years, the coupons add up to 300 and the thousand comes back.
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