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Which type of bond has low risk because they would probably not go out of business?

a. stock bond
b. municipal bond
c. savings bond
d. corporate bond

User Manolis
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1 Answer

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Final answer:

Savings bonds issued by the U.S. government are considered low-risk investments as the government is committed to repaying its debts. Corporate and municipal bonds carry varying levels of risk, while stocks are a different type of investment with their own risks and opportunities.

Step-by-step explanation:

The type of bond that has low risk because the issuer is unlikely to go out of business is the savings bond. Savings bonds are issued by the U.S. government, which makes them very secure investments since the government is virtually certain to honor its debt obligations. These bonds offer a fixed interest rate and are considered a low-risk investment compared to other types of bonds such as corporate or municipal bonds.

Municipal bonds can also be relatively safe, especially if they are general obligation bonds backed by the taxing power of a stable municipality. However, revenue bonds, which rely on specific project income, can carry more risk. Corporate bonds vary in risk based on the financial stability of the issuing company and may offer higher interest rates to compensate for this risk. Lastly, stocks are not bonds, hence a 'stock bond' isn't a correct term in this context and stocks themselves carry different kinds of risks and potentials for return.

User Nika Roffy
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