What is the definition of Bonds?
An IOU or promissory note issued by companies or governments and their agencies. Bonds provide income and some growth potential but not as much growth potential or historical price fluctuations as stocks. The amount of interest paid by a bond varies depending on its credit risk (the risk the issuer will repay the loan), and on its maturity risk. Although guarantees cannot be made, high quality, short-term bonds generally pay the lowest yields, and low quality, long-term bonds pay higher yields.
