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A: Bonds are like stocks because they are both traded. Therefore you can buy the bonds after they are originally issued while at the same time you can sell bonds before they mature. Bond prices are subject to volatility in relation to market conditions. When a person is issued a bond they are basically promised to get their money back. Bondholders are paid before anyone else, even stockholders and creditors, if the company runs into hard times or goes bankrupt. Bonds give you a stream of income based on their rate of return. Bonds are usually much less volatile then stocks are. Bonds also can provide a tax break because municipal and government bonds are sometimes exempt from state and federal taxes.
Answered 1 year ago by: Brenton Fairy
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