A Bond is a document with which one party promises to pay another within a specified amount of time. The term "demand" means that the principal plus any interest is due on demand by the bondholder rather than on a specific date. Bonds are used for many things, including borrowing money or guaranteeing payment of money. A bond can be given to secure performance of particular obligations, including the payment of money, or for purposes of indemnification. The validity of a "private" bond, payable upon demand, is determined by the same principles applicable to contracts generally. The purpose of the bond must not be contrary to public policy; it must be supported by a valuable consideration; and there must be a clear designation of the obligor and the obligee. A bond procured through fraud or duress may be unenforceable, but mistake on the part of the obligor as to the contents of a bond, or its legal effect, is not a defense to enforcement of the bond.
The term structure of interest rates is the relationship between interest rates or bond yields and different terms or maturities. As demand for bonds increases, so do bond prices and bondholder returns.The many different kinds of bonds. A new report from Moody's published in midMarch shows increasing numbers of issuers are turning to sustainable bonds to support gender equality goals. In the case of bonds, investors should understand that the bond market isn't always instantly liquid, and some bonds are easier to trade than others.