Question

Which of the following forms of bonds has the least risk

Municipal bonds

Below investment grade bonds

Corporate bonds

Treasury bonds

Answer 1

Treasury bonds have the lowest risk as they are backed by the federal government. The more security and guarantee you have to be paid back, the least the risk there is. 

Answer 2

Treasury Bonds is the correct answer.

Treasury Bonds has the least risk as these bonds are issued and backed by the United States federal government. They are credit-risk free as they have practically no default risk and thus the safest bonds to buy. These are issued by the government to finance its budget deficits.