Bond is used as a major type of financial instrument in the market. Price determination of the bonds are based on the demand-supply mechanism. Market conditions change very rapidly and so do the needs and requirements of the investors. This leads to the change in bond prices in different types of bonds.
The different types of bonds are :
Government Bonds
These are basically fixed income security type. These too are of different categories and are differentiated from one another in accordance with their respective time span for maturity. The different types of government bons can be classified into Government Bills, Government Notes and Government Bonds.
Government Bills are the form of debt securities which has a maturity period of less then 1 year.
Government Notes are the form of debt securities whose maturity period varies from 1 year to 10 years.
Government Bonds are the form of debt securities whose maturity period is over 10 years.
The bonds issued by the government is generally considered to be a safe option and the intensity of this increases with more more development and growth of the country. The government bonds of the developed countries are generally regarded as the more secured ones than the developing or the underdeveloped ones.