When you purchase individual bonds at initial issue, you’re actually lending a specific amount of your money to the bond issuer. In return for lending your money to the issuer, you’re promised a return on your investment that is the bond’s yield to maturity and the return of the face value of the bond at a specified future date, known as the maturity date. These maturity dates can be short-term (1 year or less), intermediate-term (2 to 10 years), and long-term (10 or more years). So, in reality, a bond is nothing more than an IOU or promissory note that pays interest from time to time (usually
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