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They are considered credit "risk free" because the government can always print money to repay bond holders. It doesn't mean thay will!
The reality is that there is a degree of credit risk, although generally small, but the government bonds do exhibit other risks (such as interest rate risk).
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Why do lenders put their money into government bonds?
Because these bonds are considered a very low risk dependable investment.
Why is an investment grade bond is considered a safe investment?
Investment grade bonds are considered a safe investment because there is generally only a small risk of loss of principle when they are issued by highly rated corporations, U.S. government agencies or by the United States government, especially compared to higher risk investments like stocks. There is also a periodic coupon payment that provides a consistent income which the issuer of the bonds is obligated contractually to pay.
What factors will contribute to the riskiness of these bonds?
Assuming that these bonds are just like any bonds, the biggest risk associated with investing in bonds is interest rates falling. Another risk is that the issuer will default on the bond. This generally does not happen with government bonds. Interest rates are the biggest contributor to risk in investing in bonds.
What are generally considered advantages of term loans over publicly issued bonds?
Speed, flexibility, and low issuance costs.
Why is investing in government bonds better for those who do not wish to take risks?
Bonds are generally debt investment whereby an investor loans a certain amount of money, for a certain amount of time with a certain interest to a company. And Govt bonds are the bonds issued by the National govt, generally promising to pay certain amount on certain date with a periodical interest payment.
During the war what were issued by the American government allowing the government to borrow from the American people?
Liberty Bonds, also known generally as war bonds.
Do you buy bonds for a short-term or a long-term investment?
Bonds are generally considered long-term obligations.
Why do lenders put their money into government bonds?
Because these bonds are considered a very low risk dependable investment.
Which websites carry information on ETF Treasury bonds?
Treasuries are debt obligations issued and backed by the full faith and credit of the U.S. government. Because they are considered to have low credit or default risk, they generally offer lower yields relative to other bonds.
Does BaCl2 have covalent bonds?
Generally a compound between a metal and a nonmetal is considered as an ionic compound but this is not ionic, it is covalent instead.
Where does the government get money when it has no more to spend?
Generally they issue bonds (in the UK these are known as 'gilts'). They pay interest on these gilts which have been bought from the government. At some time these bonds will be redeemed at par (the nominal value when they were issued) by the govenment.
What is a general obligation bond?
These are backed by the full faith and credit of the issuing agency. Interest payments on GO bonds are supported by the taxing authority of the state or city government and are generally considered the safest form of municipal bond.
Why is an investment grade bond considered a safe investment?
Investment grade bonds are considered a safe investment because there is generally only a small risk of loss of principle when they are issued by highly rated corporations, U.S. government agencies or by the United States government, especially compared to higher risk investments like stocks. There is also a periodic coupon payment that provides a consistent income which the issuer of the bonds is obligated contractually to pay.
Why is an investment grade bond is considered a safe investment?
Investment grade bonds are considered a safe investment because there is generally only a small risk of loss of principle when they are issued by highly rated corporations, U.S. government agencies or by the United States government, especially compared to higher risk investments like stocks. There is also a periodic coupon payment that provides a consistent income which the issuer of the bonds is obligated contractually to pay.
What is issued by state or local government to raise funds?
They are called bonds. Government bonds, municiple bonds and so on.
What factors will contribute to the riskiness of these bonds?
Assuming that these bonds are just like any bonds, the biggest risk associated with investing in bonds is interest rates falling. Another risk is that the issuer will default on the bond. This generally does not happen with government bonds. Interest rates are the biggest contributor to risk in investing in bonds.
What are generally considered advantages of term loans over publicly issued bonds?
Speed, flexibility, and low issuance costs.
