SA government bonds pay less interest than corporate bonds issued by SA companies because the government bonds carry less credit risk.

Question

Quizplus · Accepted Answer

Government bonds are considered less risky because they are backed by the full faith and credit of the government, while corporate bonds are subject to the creditworthiness of the issuing company. Investors are willing to accept a lower interest rate on government bonds in exchange for the lower risk.

SA Government Bonds Pay Less Interest Than Corporate Bonds Issued