Bonds (9)

How risky are bonds? (2)

Bonds issued by the government (or any stable government of economically strong countries) are considered the least risky.

It is in a nation's interest that bonds issued by its government


a) pay their coupons and

b) the principal sum

so that

i) the credibility of the government remains strong and

ii) it can continue to raise capital through the future issuance of bonds.