Question

What are loans to a company or government for a set amount of.time. they earn interest and are considered low-risk investments.

a) mutual funds
b) bonds
c) stocks
d) derivatives

Answer 1

b) bonds

Step-by-step explanation:

Bonds are investment assets. Investors lend money to the government and corporates over a fixed period. In return, the company or the government pays a fixed amount of interest periodically until the agreed fixed period is over( maturity date). At maturity, the investor receives back the full amount he had loaned out (the principal amount).

Bonds are considered a low-risk investment option. Governments hardly default on their bond obligations. Companies that issue bonds to the public regulated and are less likely to default on payments.