Government bonds do not pay very high interest rates. What advantages do they have for those who invest in them?

Question

Responses

The value will vary with the dollar’s exchange rate.

It is beneficial to invest money at a low interest rate.

The money is guaranteed and will earn some interest.

Businesses get tax credits for purchasing government bonds

Answer 1

The correct response is:

The money is guaranteed and will earn some interest.

Government bonds are often considered a safe investment because they are backed by the government, which significantly reduces the risk of default. While the interest rates may be lower compared to other investment options, they still provide a reliable stream of income and are less volatile than stocks or corporate bonds.