Fixed-Income Instrument Features

Fixed-income instruments, such as loans and bonds, are the most common means of financing. Fixed-income issuers include businesses, governments, and not-for-profits that promise to pay interest and repay borrowed principal to investors. Loans are commonly used between an individual or company and a bank. Bonds are more standardized fixed-income instruments designed to be more easily tradeable than loans and are commonly issued by larger companies, governments, and special purpose issuers. Bonds are a core holding for many investors, including mutual funds, pension plans, insurance companies, and central banks. This module introduces the features of fixed-income instruments and the legal contracts that govern them.