How do bonds work?
An example of an AI chatbot conversation about how bonds function in finance.
Can you explain how bonds work?
Sure! Bonds are essentially loans made by investors to borrowers, typically corporations or governments.
What are the different types of bonds?
There are several types, including government bonds, corporate bonds, municipal bonds, and zero-coupon bonds.
How do I earn money from bonds?
You earn money from bonds through interest payments, known as coupon payments, and by selling the bond for more than you paid.
What risks are associated with investing in bonds?
Risks include interest rate risk, credit risk, and inflation risk, which can affect the bond's value and returns.
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