Question

___are loans to a company or government for a set amount of time. They earn interests and are considered low-risk investments.
A) Bonds
B)Stocks
C)Derivatives
D)Mutual Funds

Answer 1

Bonds are loans to a company or government for a set amount of time. They earn interests and are considered low-risk investments. Correct answer: A
Bonds are certificates issued by a government or company in which it promises to pay back borrowed money at a fixed rate of interest on a specified date. They  generate interest and act as a source of funds to be used for businesses and personal loans.

Answer 2

Option A is the correct Answer.  Bonds are loans that are given to a company or government for a fixed period of time.

Bonds are the means to borrow money by a company or government from individuals or groups for a certain predefined period of time with an interest amount for them in return of their money.

Companies who are in need of money for buying new equipment, property, any asset, research and development, buying of a profitable project, etc, issue bonds as a mean of borrowing money.

Similarly, Governments need money to fund roads, schools, hospitals, dams and other infrastructure. So they issue bonds for the general public with an interest rate associated with it for a fixed period of time.

People buy bonds and enjoy interest on it, while issuer of the bonds borrow money and do the work.

Bonds are low risk investments.