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Mary purchases a US Treasury bond. What type of bond is it?

1) Corporate bond
2) Municipal bond
3) Savings bond
4) Government bond

1 Answer

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Final answer:

A US Treasury bond purchased by Mary is a type of 4. government bond, considered a very safe investment backed by the U.S. government and distinct from corporate or municipal bonds.

Step-by-step explanation:

Mary purchases a US Treasury bond, which is a type of 4. government bond. This bond is a financial contract where the federal government through the U.S. Department of the Treasury agrees to repay the borrowed amount with interest over a period.

Treasury bonds are considered very safe investments and are often purchased globally by individuals, banks, and sovereign funds. Unlike corporate bonds issued by firms, or municipal bonds issued by cities, Treasury bonds are backed by the full faith and credit of the U.S. government.

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