BACCALAUREATE BOND Meaning and
Definition
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The term "baccalaureate bond" refers to a financial instrument that can be issued by a college or university to raise funds for various purposes. It is a type of debt security that is specifically designed to finance the construction or renovation of educational facilities, scholarship programs, or other academic initiatives.
A baccalaureate bond operates similarly to traditional bonds in that it represents a promise by the issuing institution to repay the principal amount of the bond to the bondholders, along with regular interest payments. These interest payments are typically fixed and are paid semi-annually or annually, providing a source of income for the bondholders.
One key feature of a baccalaureate bond is that it is often tax-exempt, meaning that the interest received by the bondholder is not subject to federal income tax. This tax advantage makes baccalaureate bonds a popular investment choice for individuals seeking tax-advantaged income.
Furthermore, the name "baccalaureate bond" is derived from the Latin term "baccalaureus," which refers to a bachelor's degree. This term underscores the bond's specific purpose of supporting educational institutions in their pursuit of higher education initiatives.
In conclusion, a baccalaureate bond is a debt instrument issued by colleges or universities to raise funds for educational projects. It offers fixed interest payments and may be tax-exempt, making it an attractive investment option for individuals seeking tax benefits while supporting academic institutions.
Etymology of BACCALAUREATE BOND
The word "baccalaureate" comes from the Latin word "baccalaureatus", which was originally used to refer to someone who had obtained the first degree in arts or sciences at a university. The word is a combination of "bacca" (meaning "berry" or "hawthorn") and "laureatus" (meaning "crowned with laurels"), symbolizing the garland of laurels traditionally awarded to scholars. Over time, "baccalaureate" has come to refer to a variety of educational contexts, including a religious service or sermon delivered to a graduating class.
The term "bond" has a separate etymology and dates back to Old English. It comes from the Old Norse word "böndi", which means "householder" or "freeholder".
