Concept
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This is a simply a promise to pay an amount at a future date. Although later will consider bonds that pay several amounts at several times. As with money market instruments, the amount to be paid is called the par value. Although the terms face value, nominal value, or Principle are also used for bonds. In the future, payment date is called the maturity. In exchange for the right to receive the par amount in the future. The bond investor pays some price. Determined by supply and demand in the market to the issuer. Thus, the investor. Lends money to the issuing entity.