Investopedia
The bond market is a place where investors can buy bonds issued by government entities or corporations. There are various types of bonds available including corporate bonds, government bonds, municipal bonds, mortgage-backed bonds, and junk bonds. Bondholders have preference over shareholders in case of bankruptcy, and corporate and government bond markets are highly active and liquid. However, bonds are exposed to credit and interest rate risks, and they offer a lower rate of return compared to other investment options.
In this section, it is explained that the bond market is a marketplace where investors can buy bonds issued by government entities or corporations. There are multiple types of bonds available such as corporate bonds for financing current operations or opening new facilities, national issued government bonds, municipal bonds or Muni bonds for local projects, mortgage-backed bonds or MBS for pooled mortgages on real estate properties, and junk bonds that offer the highest returns but also present the greatest risks of default. Bondholders have preference over shareholders in the event of bankruptcy and corporate and government bond markets are among the most liquid and active in the world. However, there are also disadvantages such as exposure to credit and interest rate risks, and bonds tend to have a lower expected rate of return.
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