00:01
Right here we are asked, which of the following type of bonds have the least default risk? so we're talking about the bonds, and we need the kind that has least default risk.
00:12
Let me finish writing before i explain what default risk is and what kind has the least.
00:19
So default risks means that you basically default on your loan, meaning that you can't pay what it is that you owe.
00:28
So when you buy a bond, you are loaning them money and then they pay you back money with interest over time.
00:36
If they can't pay you back, then they default.
00:39
That's a risk that you take.
00:40
Anytime that you loan somebody money, there's a chance, there's a risk that they will default, meaning they won't be able to pay you back.
00:47
So what kind of bonds have the least amount of risk that they're going to be able to pay you back? well, there are many, many, many kinds.
00:55
There's municipal bonds, corporate bonds, high -yield bonds.
00:59
But the ones that have the lowest are going to be government bonds.
01:04
Government bonds...
