Bonds issued by a government are commonly referred to as which type of bond?

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Prepare for the QFA Investments Exam 1. Study with flashcards and multiple-choice questions with detailed explanations. Enhance your understanding and succeed on your exam!

Multiple Choice

Bonds issued by a government are commonly referred to as which type of bond?

Explanation:
Bonds issued by a government are called sovereign bonds. These are debt securities that carry the government's obligation to repay and are backed by the state's credit and taxing power. In everyday terms, they’re the government's own debt, with common examples like Treasuries in the U.S. or gilts in the U.K. This term separates government-issued debt from corporate bonds, which are issued by companies, and from debentures, which are typically unsecured corporate debt. Diluted isn’t a recognized bond type.

Bonds issued by a government are called sovereign bonds. These are debt securities that carry the government's obligation to repay and are backed by the state's credit and taxing power. In everyday terms, they’re the government's own debt, with common examples like Treasuries in the U.S. or gilts in the U.K. This term separates government-issued debt from corporate bonds, which are issued by companies, and from debentures, which are typically unsecured corporate debt. Diluted isn’t a recognized bond type.

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