Listen to a Business English Dialogue About Guaranteed bond
Timothy: Hi Samantha, have you ever heard of a guaranteed bond?
Samantha: No, Timothy, I haven’t. What’s a guaranteed bond?
Timothy: It’s a type of bond where the issuer guarantees both the principal investment and a fixed interest rate, providing investors with a secure source of income.
Samantha: That sounds like a safe investment. Who typically issues guaranteed bonds?
Timothy: They’re commonly issued by governments, municipalities, or highly rated corporations seeking to raise capital while offering investors a low-risk investment option.
Samantha: Got it. What are the advantages of investing in guaranteed bonds?
Timothy: Well, they offer a predictable return and can provide stability to an investment portfolio, especially for investors seeking steady income with minimal risk.
Samantha: Are there any drawbacks to investing in guaranteed bonds?
Timothy: One potential downside is that the returns are often lower compared to riskier investments, like stocks, so investors might not see significant growth in their investment.
Samantha: I see. Can you sell guaranteed bonds before they mature?
Timothy: Yes, you can sell them on the secondary market, but the price may fluctuate depending on changes in interest rates and the bond’s remaining maturity.
Samantha: Thanks for explaining, Timothy. Guaranteed bonds sound like a good option for conservative investors looking for stability.
Timothy: You’re welcome, Samantha. They can be a valuable addition to a diversified investment portfolio. Let me know if you have any more questions about them.