Question

What are government bonds ? What is the difference between shares and bonds ?

Answer 1

Dear Student,
Here is your answer,

Government Bond is a Debt security, issued by the government. It pays regular periodic interest to the bond holders. These are risk free.

Difference between Shares and bonds

1. Shares are equity and represent ownership in a company while bondholders have no stake in the company except that they are entitled to interest from the company.
2. Bonds are debts to the company and bondholders are the first to receive their money back in case a company dissolves.
3. Bonds are relatively safer but pay lower returns on investment. Shares can be volatile but also carry higher rewards.

Regards.