📝 Debt Security: A Comprehensive Overview
A debt security is a negotiable financial instrument that represents a formal obligation by the issuer to repay a loan to the investor. When you buy a debt security, you are essentially lending money to the issuing entity—which can be a corporation, a government, or a specific agency.
Debt securities are often referred to as fixed-income securities because they typically provide a fixed stream of income (interest payments) and a guaranteed return of the principal amount at a specified date.
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