Who is defined as an individual or entity that purchases bonds for returns?

An individual or entity that purchases bonds with the expectation of receiving returns is defined as an investor. This role is fundamental in the bond market because investors provide the necessary capital that issuers seek when they create bonds to fund projects or operational needs.

Investors analyze various factors such as the bond's interest rates, credit ratings, and the financial health of the issuer to determine potential returns on their investment. Their primary motivation is typically to earn interest income and, in some cases, to appreciate the value of the bond itself over time.

The other roles, such as issuers, underwriters, and brokers, play different parts in the bond market. Issuers are the entities that create and sell the bonds. Underwriters assist in the issuance of bonds by helping to market them and often buy them to resell to investors. Brokers act as intermediaries that facilitate transactions between buyers and sellers in the bond market, but they do not purchase bonds for their own return. Understanding these definitions clarifies the role of an investor in the broader context of municipal finance.