Which of the following is a characteristic of a bond?

A bond is a type of debt security that represents a loan made by an investor to a borrower, typically a corporation or government. One of the primary characteristics of a bond is that it offers fixed interest payments, also known as coupon payments, to the bondholder at regular intervals until the bond matures. This means that if you invest in a bond, you can expect to receive a predetermined amount of interest that is specified at the time of the bond's issuance.

This feature of predictable fixed interest payments makes bonds an attractive investment for individuals seeking stability and consistent income, in contrast to stocks, which may provide variable returns that depend on the company's performance. The fixed nature of bond payments also plays a crucial role in portfolio diversification strategies, as they can help mitigate risk compared to equities that are subject to market volatility.

In contrast, options that refer to variable dividend payments, ownership in a company, or being contingent on company profits pertain to other investment vehicles, such as stocks or equity securities. Bonds do not grant ownership in a company; instead, the bondholder is essentially a creditor to the issuer, lending funds for a fixed return, which is a fundamental distinction in understanding the nature of bonds.