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Section 4
Bonds
When you invest in bonds, you are lending money to a
government, corporation, municipality, federal agency, or
other entity. In return for that money, the issuer agrees to pay
a specified rate of interest during the life of the bond and repay
the principal when it matures. The following are some types of
bonds available for investment:
► U.S. Government Bonds
► Municipal bonds (tax-free bonds)
► Mortgage and asset-backed securities
► Corporate bonds
► Federal agency bonds
Bond Returns
Just like returns on various types and classifications of stocks
and stock mutual funds, the returns of different types of bonds
Chapter 3: You Must Have Growth In Your Portfolio
