A bond is a debt security where the issuer (borrower) owes the holders (lenders) a debt and is obligated to repay the principal and interest at a later date (i.e., maturity date). Bonds enable the issuer to finance long-term investments with external funds. Bonds and stocks are both securities, but the major difference between the two is that shareholders are part owners of the company, whereas bond-holders are lenders to the issuing company.









