What financial instrument is characterized by being a long-term debt security usually yielding a fixed rate of return?

A bond is a financial instrument that represents a long-term debt security, typically issued by corporations, municipalities, or governments. Bonds are characterized by their fixed rate of return, where the issuer pays a specified interest rate, known as the coupon rate, to the bondholders at regular intervals until the bond matures. At maturity, the issuing entity repays the principal amount to the bondholders.

Bonds are often used by issuers to raise capital for various purposes, such as funding projects, expansion, or refinancing existing debt. The fixed interest payments provide a predictable income stream for investors, making bonds a popular choice for those seeking stable returns over an extended period.

In contrast, stocks represent ownership in a company and may yield returns through dividends or capital appreciation, but they do not guarantee fixed returns. Commercial paper, while a type of debt instrument, typically has a short maturity and is used for financing short-term liabilities rather than being a long-term security. Debentures are a type of bond that is typically unsecured but shares the same characteristics as bonds in terms of being a fixed-rate long-term debt instrument.