When a company or government entity needs to borrow money, they look to investors like you for some extra help. Let’s say your bond is $100, meaning you give a company $100. That’s helpful for them, so they make a promise that they’ll pay you back with an extra 10%. In that case, you’d get $110.
Historically, bonds are viewed as a safer option because you know how much you can expect to earn from the get-go. However, investing in bonds runs the same risk as other types of investments in that you may lose capital invested.
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