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A bond is a long-term debt instrument issued by a government or state enterprise to borrow funds from the public. The issuer is the debtor and each investor serves as a creditor.
A savings bond is a long-term debt instrument issued by a government to raise funds. The issuer repays the bond’s face value to the investor upon maturity and pays periodic interest throughout the bond’s term.
The investor can forecast the total return of a debenture according to different investment conditions in order to invest appropriately.
A bond is the least risky type of investment because the issuer is a government or state enterprise.
Investors should understand the terms, conditions, potential returns and risks before investing.