Answer to Question #311636 in Accounting for Joel

Question

Chapter 13 discusses various types of bonds. For this discussion, choose two types of bonds you would invest in.

• Provide the strengths and weaknesses of each of the bonds that you have chosen.
• Explain why you have chosen the two bonds.

Answer 1

1)Treasury- They are used to set the rates for all other long-term, fixed-rate bonds. The Treasury sells them at auction to fund the operations of the federal government.

These bonds are also resold on the secondary market. They are the safest, since they are guaranteed by the United States government. That means they also offer the lowest return. They are owned by almost every institutional investor, corporation, and sovereign wealth fund. 

2) Savings- These bonds are meant to be purchased by individual investors. They are issued in low enough amounts to make them affordable for individuals. I bonds are like savings bonds, except they are adjusted for inflation every six months

I have chosen them due to their security of the investment