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Bonds differ from other financial instruments such as stocks, options, futures, and derivatives because they are not traded on an exchange like these other instruments. Bonds have certain characteristics that make them different from other debt instruments such as they contain a face value, a coupon rate, fixed maturity time and duration.
Bonds are a type of debt security that is issued by governments, corporations, or institutions. They are sold at a fixed interest rate and can be redeemed on the issuer's maturity date.
The characteristics of bonds include:
- Fixed interest rate
- Maturity date
- Credit quality
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