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18 May, 07:31

Why do you think government bonds usually have a low risk of default?

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  1. 18 May, 07:38
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    In particular, the explanation government bonds being viewed as a secure option for investment is that they are guaranteed by the administration's absolute faith and confidence. Most shareholders are convinced government of the country won't default itself on debt trustees commitments.

    Also if certain issues raised governments holds the power to increase taxes on the investment as well as they have the printing power of currency which makes such investments risk free.
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