Fixed income security or bonds are debt instrument which associated with an obligation. A bond has an issuer(=>borrower==>Debtor) who holds the liability side of instrument and an investor(=> Lender) who holds the asset side of the instrument.
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| Different Asset classes |
A bond generally associated with a term or period which is called maturity of the bond. Within this maturity period it has face value or principal which issuer is obliged to return at the end or the maturity. It also has interest or coupon part which issuer is obliged to pay to investor periodically(in US it is every six month in general). A bond is generally issued by government, corporate, municipality etc. Based on issuer and volatility bond risk category has been determined.
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