How do bonds work?
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Bonds are debt instruments issued by entities such as governments, municipalities, or corporations to raise capital. When you buy a bond, you are essentially lending money to the issuer in exchange for periodic interest payments and the return of the bond's face value upon maturity. The interest payments, known as coupon payments, are typically made semi-annually or annually. Bonds have a fixed maturity date, at which point the principal amount is repaid to the investor.
