CHAPTER 7 Bonds and Their Valuation Key features of bonds Bond valuation Measuring yield Assessing risk What is a bond? A long-term debt instrument in which a borrower agrees to make payments of principal and interest, on specific dates, to the holders of the bond. | CHAPTER 7 4 Bonds and Their Valuation Key features of bonds Bond valuation Measuring yield Assessing risk 7-1 What is a bond A long-term debt instrument in which a borrower agrees to make payments of principal and interest on specific dates to the holders of the bond. 7-2 Bond markets Primarily traded in the over-the-counter OTC market. Most bonds are owned by and traded among large financial institutions. Full information on bond trades in the OTC market is not published but a representative group of bonds is listed and traded on the bond division of the NYSE. .
