Economics Stock Market Questions
A government bond is a type of debt security issued by a government to raise funds for various purposes, such as financing infrastructure projects or covering budget deficits. It represents a promise by the government to repay the borrowed amount, known as the principal, along with periodic interest payments, to the bondholders. Government bonds are considered low-risk investments as they are backed by the full faith and credit of the issuing government. They are typically traded in the bond market and are often used by investors as a safe haven or to diversify their investment portfolios.