What is bonds and debentures?

Question

Accepted Answer

Bonds and debentures are types of debt securities issued by companies or governments to raise capital.

Bonds are long-term debt securities issued by corporations or governments, typically with a fixed interest rate and maturity date.
Debentures are unsecured debt instruments issued by corporations, backed only by the creditworthiness and reputation of the issuer.
Both bonds and debentures are used by entities to raise funds from investors in exchange for periodic interest payments and the return of principal at maturity.
Investors in bonds and debentures are exposed to credit risk, interest rate risk, and market risk.
Examples of bonds include government bonds, corporate bonds, municipal bonds, and treasury bonds.
Examples of debentures include convertible debentures, subordinated debentures, and unsecured debentures.

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