Question

Which are common types of bonds that are currently issued? Check all that apply.

Answer 1

Corporate bonds, municipal bonds, treasury bills, and treasury notes are the common types of bonds that are currently issued by the government. These bonds can be issued by citizens, and the interest levied on them is usually tax-free. The government issues these bonds to cover up deficits in their budgets, as different organs of the government issue multiple bonds, which are usually risk-free, and are usually credited by the government with an added amount of interest. In a way, issuing bonds are an easy method by which the government borrows money from the public, and pays them a certain interest for a certain period over which these bonds are issued.  

Further Explanation:

While issuing any bonds that come with a complete cash return along with the added interest, it is important to have faith in the entity or creditor from which these bonds are issued. Issuing bonds from Government while may not seem the most profitable, however, these are effective economic tools that help American citizens to save on a lot of tax that might be payable to the United States Government. The interest rates on government and municipal bonds are low, however, there is no federal taxation charged on the interest incurred by the bond issuer. These bonds, bills, and treasuries issued by the government generally are supervised under the control of the Department of Treasuries through the Bureau of Public Debt. These securities are marketable and are liquid, thus making them transferable from one recipient to the other. These securities come attached with a specific rate of interest and are payable over a specific time period. The interest can be credited directly at the end of a maturity period of a bond or can be credited over monthly installments.

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Answer Details:

Grade: High School

Chapter: Government Bonds and Securities

Subject: Economics

Keywords:

Securities, bonds, covering deficit in the balance of payments, federal taxation, rate of interest, maturity period, no risk of default.

Answer 2

The correct answer is A) corporate bonds, C) municipal bonds, E) treasury bills, and D) treasury notes.  

The common types of bonds that are currently issued are corporate bonds, municipal bonds, treasury bills, and treasury notes.  

For instance, Treasury bonds are issued by the federal government to finance its budget when it has deficits. They are credit-risk free. Municipal bonds are issued by state governments or local governments. The interest is tax-free. Treasury bonds and Treasury bills are marketable securities issued by the government of the United States. So the common types of bonds that are currently issued are corporate bonds, municipal bonds, treasury bills, and treasury notes.