Bonds can best be defined as?

Bonds are best defined as long-term debt instruments. They represent a loan made by an investor to a borrower (typically a corporation or government). In exchange for the loan, the borrower agrees to pay interest on the bond over a specified period and to return the principal amount when the bond matures.

Bonds can serve various purposes in investment portfolios, such as providing income through interest payments and diversifying the overall investment strategy by balancing the risk of equities. Their long-term nature is characterized by maturity periods that often extend beyond ten years, distinguishing them from short-term investment options like Treasury bills or commercial paper. Additionally, bonds are not equity ownership, as they do not confer ownership in the issuing entity nor represent shares of stock. Unlike negotiable securities, which can be bought and sold on the open market, the term "non-negotiable securities" is not an accurate descriptor for most bond types, as many bonds can be traded on the secondary market.

Thus, the choice describing bonds as long-term debt instruments captures their essence as financial obligations with defined terms for interest payments and principal repayment.