Analysis of Government Bonds as an Investment Tool

Authors

  • Mohammad Salem Hamidi
  • Hayatullah Momand
  • Jhanzeb Aryan

Keywords:

Property, government, money, capital, money

Abstract

When governments require funding for infrastructure projects and public expenditures, they frequently turn to bonds as a viable option. Consequently, they issue bonds to the general public as a means to attract investments, with a commitment to repay both the principal amount and the interest on the agreed-upon maturity date as outlined in the contractual agreement. Bonds can provide security for almost any type of portfolio; it is a safe and secure way to save money. They can provide predictable income when stocks are underperforming and can be a great savings tool when you do not want to risk your money. Government bonds help cover deficits in the government's budget and help finance many other things, such as budgeting. But the Federal Reserve Bank also uses government bonds to manage the nation's finances. Interest-bearing loans that are disbursed semi-annually until the contract's
conclusion can present an appealing opportunity for individuals seeking both stability and a return on their investment. Bonds are an important part of asset allocation and their fixed incomes contribute to changes in stock prices. The method of preparing this research data is analytical and descriptive and was done using the library approach.

References

Haque MM, Bacha OI, Chowdhury MA, Masih M. Who Drives Whom-Sukuk or Bond? A New Evidence from Grager Causality and Wavelet Approach. Wiley Journal of Financial Economics. April 2017.

Raei F, Cakir S. Sukuk vs. Eurobonds: is there a difference in value-at-risk? IMF Working Papers 2007/237. IMF Working Papers. 2007;7(237). doi: 10.5089/9781451868012.001.

Aschauer DA. Is public expenditure productive? J Monet Econ. 1989; 23(2, March):177–200. doi: 10.1016/0304-3932(89)90047-0.

Barro Robert J. The Ricardian approach to budget deficit. J Econ. 1989;3(2, Spring): 37–54.

David Alan Aschauer, Does Public Capital Crowd Out Private Capital? Federal Reserve Bank of Chicago, Chicago, IL 60604, USA, Received May 1988. Final version received April 1989.

Dirk J. Wolfson, Public Finance and Development Strategy, The Johns Hopkins university press, London, 1979.

Published

2023-10-09

How to Cite

Hamidi, M. S. ., Momand, H. ., & Aryan, J. . (2023). Analysis of Government Bonds as an Investment Tool. Journal of Banking and Insurance Law, 6(2), 22–25. Retrieved from https://lawjournals.celnet.in/index.php/jbil/article/view/1387