Question

What is a written promise to pay a certain sum of money on a specified future date, due less than one year from the date of issuance? This obligation may arise from purchases, financing, or other transactions.

Answer 1

A bond is a financial contract through which a borrower agrees to repay the amount that it borrowed. It specifies an amount that will be borrowed and the repayment terms. Different types of bonds are issued by different entities like corporations, municipalities, states, and the federal government.

Step-by-step explanation:

A bond is a financial contract through which a borrower agrees to repay the amount that it borrowed. A bond specifies an amount that one will borrow, the amounts that one will repay over time based on the interest rate when the bond is issued, and the time until repayment. Corporate bonds are issued by firms; municipal bonds are issued by cities, state bonds by U.S. states, and Treasury bonds by the federal government through the U.S. Department of the Treasury.