A bond is its issuer's written promise to pay the amount equaling the par value of the bond with interest.
The bond period is the period from the issuance of the bond to the maturity of the bond. On the maturity date of the term bond, the face value of the principal bond must be repaid to the bondholder. Term bonds are in contrast to series bonds, which mature in installments over a period of time.
Bonds can be classified into four types: corporate bonds, municipal bonds, government bonds, and agency bonds. The bond price is inversely proportional to the coupon rate. When interest rates go up, bond prices go down, and when interest rates go down, bond prices go up.
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