A bond is a fixed income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). A bond could be thought of as an I.O.U. between the lender and borrower that includes the details of the loan and its payments. Bonds are used by companies, municipalities, states, and sovereign governments to finance projects and operations. Owners of bonds are debtholders, or creditors, of the issuer. Bond details include the end date when the principal of the loan is due to be paid to the bond owner and usually includes the terms for variable or fixed interest payments made by the borrower.
Source: https://www.investopedia.com/terms/b/bond.asp
In other words, it has to do with loans and debt. If someone holds a bond over someone else, they have debt to claim.
Jerald, you answered the question very well, thank you!
I also was unsure about bonds but that sums it up nicely. I'm also reading that they are a lower risk alternative to stocks with a guaranteed return. Is that so?
James Bond?
I am kidding. lol I honestly didn't have a solid understanding of it like yourself but the first response I find summarized it very well.