Final answer:
A bond payable to anyone who holds it physically is known as a bond in bearer form, which is distinct from registered bonds that are tracked by ownership records.
Step-by-step explanation:
The type of bond that is payable to whomever has physical possession of it is known as a bond in bearer form. This means that the security is unregistered and ownership is transferred simply by handover. Historically, bearer bonds had actual coupons that the holder would clip and redeem for interest payments. Nowadays, such forms are less common, with registered bonds being favored for their traceability and security.
A bond is an instrument of indebtedness and includes various components such as face value, coupon rate, and maturity date. The bond's face value is the principal amount that will be repaid upon maturity, while the coupon rate is the interest rate paid by the bond issuer, normally on a semi-annual basis. Understanding the bond's face value, coupon rate, and maturity date in conjunction with current market interest rates enables investors to calculate the bond's present value, which represents the maximum price an investor is ready to pay for the bond at any given time.