Bond

Bond

It is called as debt instrument . for e.g you want to start a new project ,suppose cost of project is approximately Rs. 1 lakh however you do not have the required capital to start it , you asked your friend or relatives to lend that money to you with promise of returning it back with principal amount of Rs.1 lakh and an interest of 6% every year for 3 years . When your friend gives you the amount he will take a receipt from you i.e (bond) .Now he has bought a bond in your project under your company .Thus, a bond is a means of investing money by lending to others .

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