Bonds summarize all securities which guarantee interest payments and repayment of the principal value. These interest-bearing securities are launched by different issuers, e.g. states, industrial firms or banks, throughout the world.

The majority of these securities are quoted on the stock exchange.

Bonds consist of a bond certificate and a coupon sheet. The certificate embodies the creditor position and the coupon sheet consists of single coupons (interest warrants) and the talon.

There are a lot of different types of bonds. In the next section I will explain how investors can distinguish the bonds.

According to Grill&Perczynski (1999, p.209, p.211, p.226) bonds can be organized at the following criteria:

Issuer: public authority, banks, industrial companies

Interest charges: fixed, variable, non-interest-bearing

Run time: short term (until 4 years), medium-term (4-8 years), long term (from 8 years)

Repayment: total due (principal value will be paid back at maturity) sinking-fund bonds (are paid back in partial amounts), eternal loans (never paid back)

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