Classification of Bonds
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Chemical bonds are forces that hold atoms together to make compounds or molecules. Chemical bondsinclude covalent, polar covalent, and ionic bonds. Atoms with relatively similar electronegativities share electrons between them and are connected by covalent bonds.
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bond classification
As a fixed income security, a bond is classified according to (1) Collateral: whether the bond is fully secured by a specific asset that can be sold by the bondholder to satisfy a claim (see secure bond), or is secured only by the issuer's reputation and credit (see debenture). (2) Convertibility: whether the bond can be exchanged for other securities of the issuing company at a future date (see convertible bond). (3) Maturity: whether the bond has one maturity date or several, and how long is the maturity period: longer the maturity period, greater the risk and higher the interest rate. (4) Price: whether the bond is sold below par value, at par value, or above par value.
(5) Transfer method: whether it is a bearer-bond or a registered bond.
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