CAPITAL BOND Meaning and
Definition
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A capital bond refers to a type of financial instrument or security issued by a corporation, government, or other entities to raise capital. It represents a debt obligation that the issuer sells to investors who lend their money to the issuer for a fixed period. Investors who purchase capital bonds become creditors of the issuer and are entitled to receive periodic interest payments, usually at a predetermined fixed rate, as compensation for lending their money.
A key characteristic of a capital bond is its long-term maturity, typically ranging from several years to several decades. At the end of the bond's maturity period, the issuer is obligated to repay the initial principal amount borrowed by the investors. This repayment can be made through a lump sum payment or amortized over the bond's tenure.
Capital bonds are often considered relatively safe investments compared to other types of securities as they offer fixed income payments and a predetermined repayment date. Additionally, some capital bonds may be backed by tangible assets or collateral, providing a measure of security for investors.
Interest rates, credit ratings, and market conditions are influential factors that determine the pricing and yield of capital bonds. Investors analyze these variables when assessing the potential returns and risks associated with investing in capital bonds. Overall, capital bonds play a vital role in raising capital for organizations and provide investors with a fixed income stream over an extended period.
Common Misspellings for CAPITAL BOND
- xapital bond
- vapital bond
- fapital bond
- dapital bond
- czpital bond
- cspital bond
- cwpital bond
- cqpital bond
- caoital bond
- calital bond
- ca0ital bond
- caputal bond
- capjtal bond
- capktal bond
- capotal bond
- cap9tal bond
- cap8tal bond
- capiral bond
- capifal bond
- capigal bond
Etymology of CAPITAL BOND
The term "capital bond" is a compound noun formed by combining the words "capital" and "bond".
1. Capital: The word "capital" originated from the Latin word "caput", meaning "head". In Latin, "caput" was used to represent wealth or resources as the "head" or main source of economic power. Over time, the term "capital" evolved to refer to wealth, assets, or financial resources that are utilized for investment or business purposes. In the context of finance, "capital" generally refers to funds invested into a business or utilized for long-term projects.
2. Bond: The word "bond" also has Latin origins, deriving from the Latin word "bundus" meaning "fastened" or "bound". In medieval times, it referred to written agreements or contracts that bound two parties together.
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