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Bonds

In the world of finance, bonds are basically IOUs that allow companies or governments to borrow money from investors. When you buy a bond, you're lending money to the issuer in exchange for regular interest payments and the promise of getting your principal back at a set time in the future.

Bonds come in many forms, such as government bonds (issued by governments), corporate bonds (issued by companies), and municipal bonds (issued by local governments). There are also different types of bonds based on their maturity (the length of time until they mature), interest rate, and credit rating (a measure of the issuer's ability to repay the bond).

Bonds are considered a relatively safe investment, as they are backed by the issuer's promise to repay the loan. However, they can also be affected by changes in interest rates and the issuer's creditworthiness.

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