Question: I need a response post for the discussion post below, with one APA in-text citation and one APA reference. When individuals look to invest in

I need a response post for the discussion post below, with one APA in-text citation and one APA reference. When individuals look to invest in bonds they are doing so for many of reasons. One is that bonds are typically a fixed rate of return that is known up front for a duration of time. "Bond investments can be appropriate for people seeking current income, or for those who want to lower their portfolio risk by diversifying among asset classes or both"(Doorn, P. (2024)). This comes with less risk compared to buying mutual funds or stocks however such bonds like corporate bonds will come with a higher return but greater risk. This is due to the company offering the bonds and could go bankrupt or simply just not repay. Looking into the different types of bonds we can purchase is another decision to make. You can purchase a municipal bond which is tax exempt while having this great benefit they typically have a lower rate of return. You could also choose treasury bonds which are back by the government. This is guaranteed return on your money one the bond reaches maturity. It is safe and less risky. One thing to note is that you do own taxes on the money gained in a treasury bond. When looking at tax brackets and which bonds to choose from it all will be different per individual with variables such as income and goals. For someone that pays 33% it is better off for them to choose a municipal bond so that they are exempt from the tax burden. While someone that pays 22% could

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!