Types of Bonds

 Types of Bonds 




Types of Bonds 


There are various types of bonds, including:


  • Government Bonds: Issued by governments to finance public spending.

  • Corporate Bonds: Issued by corporations to raise capital for various purposes.

  • Municipal Bonds: Issued by local governments or municipalities to finance public projects.

  • Savings Bonds: Issued by governments to individual investors as a means of saving money.

  • Convertible Bonds: Bonds that can be converted into a specified number of shares of the issuer's common stock.

  • High-Yield Bonds (Junk Bonds): Bonds with lower credit ratings, typically offering higher yields to compensate for the increased risk.

  • Zero-Coupon Bonds: Bonds that do not pay interest during their term but are sold at a discount and redeemed at face value at maturity.

  • Callable Bonds: Bonds that the issuer can redeem before the maturity date.

  • Floating Rate Bonds: Bonds with interest rates that adjust periodically based on a specified benchmark rate.

  • Asset-Backed Securities (ABS): Bonds backed by a pool of assets such as mortgages, auto loans, or credit card debt.

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