Bond certificate

Definition

A bond certificate is a document that serves as evidence of a bondholder's investment in a corporation or government entity. It includes details such as the principal amount, interest rate, maturity date, and issuer information.

5 Must Know Facts For Your Next Test

1. The face value on a bond certificate represents the principal amount the issuer agrees to repay at maturity.
2. Bond certificates typically include the coupon rate, which specifies the interest payment intervals and amounts.
3. Maturity dates on bond certificates indicate when the principal amount must be repaid to investors.
4. Bond prices in financial markets are influenced by changes in market interest rates relative to the coupon rate listed on the bond certificate.
5. Bond certificates can be issued at par (face value), at a discount (below face value), or at a premium (above face value).

Review Questions

Related terms

Coupon Rate: The annual interest rate paid by the bond's issuer, expressed as a percentage of the face value.

Maturity Date:

The specific date when the principal amount of a bond is due to be repaid to investors.

Face Value:

The nominal or par value of a bond that is repaid to investors at maturity.