What are the different types of bonds and how do they compare?

What are the different types of bonds and how do they compare?

There are several types of bonds, including government bonds, corporate bonds, municipal bonds, and zero-coupon bonds. Each type has its own risk and return profile.

Can you explain the differences between government and corporate bonds?

Sure! Government bonds are issued by national governments and are generally considered low-risk. Corporate bonds are issued by companies and can offer higher returns but come with higher risk.

What about municipal bonds? Are they a good investment?

Municipal bonds are issued by local governments and often provide tax advantages. They can be a good investment, especially for those in higher tax brackets.

How do interest rates affect bond prices?

When interest rates rise, bond prices typically fall, and vice versa. This is because new bonds are issued at higher rates, making existing bonds less attractive.