Definition: Evidence of a long-term debt, by which the bond issuer (the borrower) is obliged to pay interest when due, and repay the principal at maturity, as specified on the face of the bond certificate. The rights of the holder are specified in the bond indenture, which contains the legal terms and conditions under which the bond was issued. Bonds are available in two forms: registered bonds, and bearer bonds.
Alright class, settle down now, let’s delve into this word, somehow!
Today we're tackling ‘bond,’ a financial term you need to know,
It’s more than just a friendship, a feeling warm and glow.
The dictionary gives us the facts, precise and clear,
Let’s break it down together, banish any fear.
(Pause for emphasis)
“Evidence of a long-term debt,” that's where we begin,
A borrower needs money, let the lending begin!
They issue a ‘bond,’ a promise bright and bold,
To pay you interest regularly, as stories have been told.
Then at the end – “maturity” they call it, see?
The principal is returned, completely free!
It’s like a loan agreement, carefully designed,
With rules and regulations, neatly intertwined.
(Slightly slower pace)
“The bond indenture,” that’s key, you must recall,
A legal document, standing strong for all.
It outlines the conditions, step by careful step,
Protecting your investment, a promise to keep!
And finally, two types we find, it's true:
"Registered bonds," with names known to you,
“Bearer bonds,” though less common these days,
Where ownership is held in ways that amaze.
So there you have it – a ‘bond’ explained with glee,
A crucial concept for financial fluency!
Now, does anyone have any questions? Don't be shy, let's see,
Who wants to share what they’ve learned about this decree?