Risk-free bond
From Wikipedia, the free encyclopedia
A risk-free bond is a theoretical bond that repays interest and principal with absolute certainty. In practice, government bonds are treated as risk-free bonds, as governments can raise taxes or indeed print money to repay their domestic currency debt. For instance, U.S. Treasury notes and bonds are considered risk-free bonds, even though investors in U.S. Treasury securities do face a negligible amount of credit risk. That this credit risk is not always negligible, is shown by the example of Russia that defaulted on its domestic debt in 1998.
[edit] See also
 |
This economics or finance-related article is a stub. You can help Wikipedia by expanding it. |
