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Question

What is a Bond?

Answer

A Bond is a form of debt issued by companies or the Government (see Gilts) to raise money as an alternative to taxation (for Governments) and share options (for companies).  If you buy one you are, in effect, lending money to the issuer.  In return, the issuer promises to pay you a set rate of interest each year and to repay your capital at a set date in the future (the maturity date).

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