Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
What is a bond, James Bond? how is it related to personal checks.
Expert Solution
Step 1
Bonds are one of the important income yielding financial assets in the economy and not James Bond which is a film character. There are different types of bonds in the economy which provides a fixed level of income to the bondholder. The bond is issued by the firm or company that borrows a sum of funds from the people who are known as the creditors. The firm or company that provided the bond states that it will repay the amount in a period defined in the bonds and up to that period the bond issuer will pay the predetermined interest rate to the bondholder in the economy.
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