Economics Bonds Questions
The role of bondholders in the bond market is to lend money to the issuer of the bond, typically a government or corporation, in exchange for periodic interest payments and the return of the principal amount at maturity. Bondholders are essentially creditors of the issuer and have a legal claim on the issuer's assets. They provide the necessary funds for the issuer to finance its operations or projects, and their investment is backed by the issuer's promise to repay the debt. Bondholders also play a crucial role in determining the interest rates and yields in the bond market through their buying and selling activities.