Understanding Bonds: Types and Definitions

A bond is a contract of debt whereby one party called the borrower or issuer borrows funds from another party called the investor or ______.

A bond indenture or deed of trust is the document which shows in detail the terms of the bond and the rights and duties of the borrower and other parties to the ______.

A certificate given to bondholders or investors to provide evidence of ______.

Term bonds are bonds with a single date of ______.

Serial bonds are bonds with a series of maturity dates or bonds that mature by ______.

An extendable bond gives the holder and/or the user, the right to extend the initial maturity to a longer ______ date.

Zero-coupon Bonds is a bond that does not pay interest but instead trades at a deep discount, rendering a profit at maturity when the bond is redeemed for its full face value. Income Bonds is a bond whereby the issuer agrees to pay the principal but the coupon payments are subject to ______.

Participating bond is a bond that, besides being entitled to interest at a fixed rate, is further entitled to share in additional ______.

Mortgage bonds are bonds secured by a mortgage of real ______.

Collateral trust bonds are bonds secured by investments in ______ and bonds.

Debenture bonds are bonds without collateral ______.

Junk bonds are high-risk and high-yield bonds issued by entities that are heavily indebted or otherwise in weak financial ______.