Government and Corporate Bonds
Posted by Samantha Martinez on May 8th, 2010
Just like stocks, bonds are also traded. When a person trades in bonds which may either be from a government or private institution, they invest in the company and at the end of a particular period, hey would get back their money with some interest. In simpler terms, a bond is like giving someone a loan.
The advantage of dealing with bonds is the fact that no matter what happens to a company, a bond holder will always be paid first. There are two types of bonds, government and corporate bonds. Government bonds are mainly offered to help in the running of government activities. For instance, there are municipal bonds. Money got from these bonds is used in the running of schools, hospitals and other facilities available to the public. On the other hand, corporate bonds are given by business. They are issued to other businesses to aid in their running like catering for the extra business expenses.
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