Bonds Valuation: Introduction

$A(n)$

is a long$-$term contract under which a borrower agrees to make payments of interest and principal, on specific dates, to the holder of bond. There are

four main types reflecting who the issuers are:

$,$ corporate, municipal, and foreign. Each type differs with respect to

and expected return.

All have some common characteristics even though they may have different contractual features.