What is the primary characteristic of a bond?

A bond is fundamentally a fixed income instrument that signifies a loan made by an investor to a borrower, typically a corporation or government. This means that when you purchase a bond, you are essentially lending money to the issuer in exchange for periodic interest payments and the return of the bond's face value when it matures. This characteristic of generating predictable income over time, coupled with the obligation for the issuer to repay the principal amount, underscores its role as a fixed income investment.

The other options do not accurately describe the nature of bonds. For instance, representing ownership in a company refers to stocks, not bonds. Bonds do indeed come with fixed terms of repayment, which involves a set maturity date when the principal is returned. Lastly, while bonds can be used for government borrowing, they are not exclusively for that purpose, as corporations also issue bonds for financing their activities.