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A bond is a fixed income instrument that represents a loan made by an investor to a borrower for a determined period of time and in which the borrower pays the lender a coupon (annually or semiannually) and the face value at the end of the period (bullet) or following an agreed amortizing schedule (amortisingamortizing). Bond Bonds are called fixed-income instruments because returns are fixed. Compared to Equity instruments, bonds do not carry any kind of ownership of a company and therefore rank senior to equity instruments. The term senior refers to the preferential position for claims during a default. Bonds represent the largest segment of capital markets in terms of size ($100.13 trillion in 2017 according to Wikipedia).
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