Describe the characteristics of a bond and provide an example of a firm or government entity that has recently issued (sold) these securities.

A bond is an investment security that has been issued by a corporation or government. The borrower must repay principal as well as interest to the investors within a set period. The securities tend to be seen as safe investments, since the return is fixed and investors are assured that they will be paid back.

Apple Inc. has announced recently that they plan to sell bonds for $7 billion in order to raise money to be used by the company to pay dividends, repurchase shares and fund other corporate activities. It is a good example of companies using bond markets to raise capital when needed. Fixed income investments also provide investors the opportunity to make returns. It is evident that bond markets remain popular with firms because of their predictability and the potential returns they can offer investors.