Bonds
Bonds are fixed-income securities issued by governments or corporations in exchange for a loan. These bonds pay a fixed interest rate on top of the principal amount over a predetermined period. Bonds are traded in the bond market, where they are bought and sold. The creditworthiness of the bond issuer determines the quality of the bond, which is indicated by its credit rating. In India, government bonds carry the 'SOV' rating, while corporate bonds may be rated from AAA (highest) to CC (extremely risky). These ratings help investors assess the risk involved in purchasing the bond.
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