Government bonds are considered to be risk-free assets why


1. Gugenheim, Inc., has a bond outstanding with a coupon rate of 6.4 percent and annual payments. The yield to maturity is 7.6 percent and the bond matures in 20 years. What is the market price if the bond has a par value of $2,000?

2. Government bonds are considered to be 'risk-free' assets. Why, then, do they pay a return? Are they truly completely free of risk?

3. What is the monthly payment on 11-year, $179,619 mortgage at 7.16% annual interest, compounding monthly?

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Financial Management: Government bonds are considered to be risk-free assets why
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