The features of a bond are
determined by characteristics such as duration,
repayment, interest rate,
currency and issue price.
In return for providing the borrower with capital,
the buyer of a bond receives interest payments. These are based on a percentage of the nominal value. A
distinction is drawn between floating-rate bonds and fixed-rate bonds
(bond types).
From the issuer's viewpoint, floating-rate bonds are particularly attractive during period
of falling interest rates, because the interest rate adjusts to market conditions and borrowing costs
decline with each rate drop. The opposite is true for investors, for whom fixed-rate bonds
are more advantageous when interest rates are falling.
| 
