Can someone help me with economics?

  • Thread starter Thread starter surrah91
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Corporate bonds are issued by companies, government bonds are issued to finance governments' needs. Corporate bonds show a company-specific credit risk, on the top of the country risk specific to a government. Let me know if you want me to go into more detail.
 
A corporate bond is a bond issued by a corporation. It is a bond that a corporation issues to raise money in order to expand its business.

A government bond is a bond issued by a national government denominated in the country's own currency that the government uses to raise capital.

Both of them are bonds, so they are both a debt instrument used to raised capital. As far as I can tell, the only real difference is who issues them. However, corporate bonds have a higher risk. As with most things, bigger risk means bigger possible reward. Corporate bond holders are compensated for this risk by receiving a higher yield than government bonds.
 
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