Are long term treasuries risky or risk free?

Treasury bonds are the main form of national credit. The purpose of issuing government bonds is often to cover the country's fiscal deficit, or to finance some construction projects that cost a lot of money, as well as certain special economic policies, or even for war. Since the national debt is based on the tax of **** as a guarantee for repayment of debt and interest.

As a result, it is less risky, more liquid, and has lower interest rates than other bonds.

From the perspective of the form of bonds, the treasury bonds issued by China can be divided into three types: voucher treasury bonds, bearer (physical) treasury bonds, and book-entry treasury bonds.

Certificate-type treasury bonds are a kind of state savings bonds, which can be registered and reported as losses, and the creditor's rights are recorded with the voucher-type treasury bond collection vouchers, which cannot be listed and circulated, and the interest is calculated from the date of purchase. During the holding period, if the coupon holder needs to hold cash under special circumstances, he can redeem it in advance at the purchase outlet. In addition to the repayment of the principal, the interest is calculated according to the actual number of days held and the corresponding interest rate grade, and the handling agency will charge a handling fee according to the amount of the principal redeemed.

Bearer (physical Treasury bond is a kind of physical bond, which records claims in the form of physical coupons, with varying face value, bearer, no loss report, and can be listed and circulated. During the issuance period, investors can purchase directly over the counter of the institution that sells treasury bonds. Investors who set up an account on the ** exchange can entrust the ** company to subscribe through the trading system.

After the end of the issuance period, holders of physical coupons can sell them over the counter, or they can hand over the physical coupons to the ** exchange for custody and then sell them through the trading system.

Book-entry treasury bonds record creditor's rights in the form of bookkeeping, issue and trade through the trading system of the ** exchange, and can be registered and reported as loss. Investors who buy and sell on the books must set up an account on the exchange. Since the issuance and trading of book-entry treasury bonds are paperless, it is highly efficient, low-cost, and safe.

Treasury bonds listed as risk-free investments?

Bonds are subject to significant interest rate risk. When interest rates rise, the bond's **will**. If the cash flow is insufficient, the sale of bonds to cash out will result in losses.

In investment, treasury bonds are classified as risk-free investments

By:lghvip vip - lift people level 4 12-25 13:07) is already very good, it is true that the issuance of government bonds is guaranteed by the state credit, there is no credit risk, it is called gilts, but if inflation rises, long-term government bonds will be subject to greater interest rate risk.

As a simple example, suppose the coupon rate of the 10-year Treasury bond is 5%, and the inflation rate may become 5% in 5 years, and the interest rate on the 1-year time deposit of the bank will also rise to 4%, so that the yield level of the 10-year Treasury bond invested now will rise, and **will**.

Long-term Treasury bonds are risk-free investments in terms of credit risk. But given inflation, it should be a risky investment, and the risk is still very high.

As everyone's understanding of risks is gradually deepening, and the understanding of risks such as inflation and interest rates is also increasing, for long-term investment, inflation risks must be considered, and from the perspective of this year's long-term treasury bonds, they are no longer as popular as before.

Therefore, all things considered, long-term treasury bonds are risky investments, and they are still very risky.

Generally speaking, it is risk-free.

The national debt isRisk-free bondsThis is a bond issued by the state and the security is very high

1.Treasury bonds are bonds guaranteed by the state's credit and basically do not have any risks;

2.The cycle of treasury bonds is relatively long, and the use of funds is not very convenient;

3.Treasury bonds are generally more suitable for conservative and elderly investments.

Many people don't know much about bonds, and many people don't know the difference between convertible bonds, corporate bonds and government bonds. It can be said that treasury bonds are all bonds, the most secure, the best credit bonds, basically there is no risk, because treasury bonds are guaranteed by national credit, and then found bonds, if you believe that there will be no problems in your home country, then buying treasury bonds is the safest way to invest.

1. Treasury bonds are bonds found with national credit as a guarantee

Treasury bonds are the bonds with the highest safety rating among all bonds, the main reason is that treasury bonds are guaranteed by national credit, and as long as the country does not have any problems, treasury bonds will always be the safest investment and wealth management products.

Treasury bonds are issued by the state for the purpose of raising funds for national construction.

Second, treasury bonds are generally more suitable for conservative investors

Treasury bonds are risk-free bonds, and the absence of risk also indicates the yield.

Probably lower, with higher yields on Treasuries than banks but lower than corporate bonds.

Treasuries are more suitable for conservative investors, mainly because they are risk-free and can enjoy higher interest rates than banks. Treasury bonds are more suitable for the elderly to invest in lead capital, because the elderly have been unable to withstand the toss, if there is a loss, the old life is not guaranteed, for the elderly, higher than the bank yield should be a good choice.

3. What are the advantages and disadvantages of national bonds?

The advantages of treasury bonds have already been said at the beginning, there is no risk, security is high, and the interest is higher than bank deposits.

The disadvantages of treasury bonds are also obvious, the investment cycle is relatively long, basically more than 3 years, the use of funds is not very flexible and convenient, and the income is only higher than bank deposits, which is not suitable for many young people.

Any financial management is blind and risky, and the debt bridge can only be said to be a medium and low risk, and the treasury bond is almost impossible to lose, but it is not absolutely risk-free, and the return is relatively low, after all, the risk is proportional to the return.

Of course, this is not the case, and treasury bonds also have certain risks, but the risks are negligible compared to other projects.

That's true, but the government debt may also be more stringent.

There are six types of risks associated with investing in Treasury bonds, which are as follows:

1. Purchasing power riskPurchasing power risk. Refers to the risk of a decrease in the purchasing power of money due to inflation. Purchasing power risk is a bond investment.

one of the most common risks;

2. Risk of default.

Risk of default. It refers to the risk that the borrower of the bond issuance will not be able to pay the interest or repay the principal of the bond on time, which will bring losses to the bond investors. Among all the bonds, the Ministry of Finance.

The issued treasury bonds, because they are guaranteed by **, are often considered by the market to be gilts, so there is no risk of default;

3. Interest rate risk: The interest rate risk of bonds. Refers to the risk of loss to investors due to changes in interest rates. There is no doubt that interest rates are one of the most important factors in influencing bonds**

When interest rates rise, bonds decrease; When interest rates fall, bonds** rise. Since bonds** fluctuate with interest rates, even Treasury bonds that are not at risk of default are subject to interest rate risk;

4. Liquidity riskLiquidity risk. refers to the risk that investors will not be able to sell the bond at a reasonable price in the short term;

5. Operational riskOperational risk. It refers to the mistakes made by the management and decision-makers of the unit issuing bonds in the process of operation and management, resulting in a decrease in assets and losses for bond investors;

6. Reinvestment risk.

Investors invest in bonds.

There are three types of benefits that can be obtained:

1. Bond interest;

2. Income from bond trading;

3. Temporary cash flow.

Interest earned by reinvesting such as interest received on a regular basis and principal repaid at maturity.

In fact, the reinvestment risk is for the third type of income. As we will see in the following sections, in order for an investor to achieve a return equal to the yield determined at the time of the purchase of the bond, these temporary cash flows must be equal to the yield determined at the time of the bond.

Reinvest.

Investment in government bonds is the main form of national credit, with the aim of covering the country's fiscal deficit.

Or to finance some costly construction projects, as well as some special economic policies, and even for war.

1. Treasury bonds are at risk of straightening socks.

2. Treasury bonds are the least risky investment and the least risky financial bonds among all financial instruments. Short-term government bonds, in particular, are almost equivalent to cash.

3. The purpose of issuing treasury bonds is often to make up for the national financial deficit, or to raise funds for some costly construction projects, as well as some special economic clearance policies, and even for war. Since the national debt is based on the tax of **** as a guarantee for repayment of debt and interest. As a result, it is less risky, more liquid, and has lower interest rates than other bonds.

From the above, we can know that treasury bonds are risky, and among all financial instruments, the residual capital bonds are the least risky investment and the least risky financial bonds. In fact, any investment product is risky.

With the continuous development of social and economic tourism, I believe that many friends should have heard such a passage in real life, that is, treasury bonds are bonds without risk, in fact, treasury bonds are really bonds without any wind and rough bench risk? In fact, there is a certain risk in government bonds, but when the country's strength is relatively strong, there is rarely a risk of such a situation in government bonds, that is to say, in a sense, this statement is correct.

First of all, we must understand that the state issues treasury bonds on the basis of its credit, generally in accordance with the principle of debt issuance, through the formation of a creditor-debt relationship through raising funds from the society, that is to say, to buy treasury bonds and hold treasury bonds, after maturity can be risk-free harvest of regular coupons and maturity principal, but in fact, in our life in China, it does not mean that there is no risk, first of all, we must understand that if we buy treasury bonds, then it becomes a non-negotiable trading commodity. There is no way to invest in treasury bonds in our hands, and at this time there is no liquidity, and the term of treasury bond investment is generally three to five years, so if it is redeemed in advance at this time, it will cause losses.

Of course, we don't need to worry too much, because in fact, in our country rarely happens in such a situation, for investors, will be ready to hold for a long time, generally speaking, for investors, as long as they hold the treasury bonds, they will hold the treasury bonds for a long time, will not sell them, which makes the risk of investors is still very low, and as long as the country's economy continues to develop, then the utility of the treasury bonds will be particularly large.

To sum up, we can clearly find that there is still a certain risk in government bonds, but at least in China, where we live, the risk of debt is still very low, after all, it is based on the country's economy.

So there's no need to worry too much.

Incorrect, there are some risks associated with any bond, but the risk is relatively low, so it is risky.

This statement is very incorrect, because there are ups and downs, so it is false to say that there is no risk.

This argument is correct, because its background is that the central bank is the backing of the state, and the state has issued some bonds without any risk in order to regulate and control our market economy.

Treasury bonds are subject to credit risk and interest rate risk. Credit risk is the risk of national credit, which is generally not formed.

Interest rate risk refers to the fact that when you buy treasury bonds, the deposit interest rate increases in the same period, and you do not want to lose the handling fee to redeem the treasury bonds in advance, so you can only watch the deposit interest rate rise. In addition, after the maturity of the treasury bonds, if they cannot be paid in time, the time of expiration will not be subject to interest.

There are eight main risks associated with bond investment:

1. Interest rate risk.

Interest rate risk refers to the risk that changes in interest rates will cause changes in bonds** and yields.

2. ** Change risk.

The bond market** is constantly changing, and if it does not change with the investor**, then the investor's capital will inevitably suffer.

3. Inflation risk.

The repayment of interest or principal that the bond issuer promises to pay to the bondholder in the agreement is a fixed amount agreed in advance. When inflation occurs and the real purchasing power of money decreases, it will result in a relative reduction in what can be purchased in the market, and may even be lower than the purchasing power of the original investment amount.

4. Credit risk.

In the investment of corporate bonds, there is a risk that the enterprise will not be able to fully fulfill its responsibilities due to various reasons.

5. Transfer risk.

When investors are in a hurry to transfer the bonds in their hands, they sometimes have to discount the ** or pay a certain commission.

6. Sexual risk.

Bonds with ** clauses, because it often has the possibility of forced call, and this possibility is often when the market interest rate falls, and the investor charges the actual increase interest at the nominal interest rate on the face of the bond, the investor's expected return will suffer.

7. Tax risk.

**Any tax deduction or increase on bonds will affect investors' return on their investment in bonds.

8. Policy risk.

Refers to the risk of volatility in bonds** due to policy changes. For example, the sudden introduction of interest rate hikes and hedging subsidies for bonds.