From The Jolly Contrarian
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| A [[bond]] is a [[debt security]], traditionally bearing a [[fixed rate]] of interest. Compare with a [[note]] — which traditionally bears interest at a [[floating rate]], and a [[medium term note]], which can be fixed, floating or structured with all kinds of exotic [[derivative]] payoffs, but is issued from a [[medium term note programme]], rather than as a stand-alone issue.
| | #redirect[[Debt security]] |
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| Contrast all those [[debt securities]] to [[equity securities]] — instruments such as shares, warrants units, which pay neither principal nor interest, but rather account for the overall performance of the company who issue them.
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| [[Debt security|Debt securities]] generally rank ahead of equity securities in the capital structure of the issuer. This is because an issuer must pays off [[creditor|creditors]] before [[shareholder|shareholders]]. | |
Latest revision as of 20:51, 25 February 2021