1) Why are T-bills considered among the safest investments? 2

Answer 1- Treasury Bills or T-Bills are considered as the safest fixed-income investment because they are backed by the government and so are nearly free of default risk. They offer predetermined yield, have a fixed maturity date and amount.

Answer 2 - Corporate bonds offer higher interest rates than government bonds in order to compensate the investors for the high degree of risk involved in corporate bonds. Higher rate of interest is the reward to the investors for bearing higher risk.

Answer 3 - Generally start-up companies prefer to issue Junk Bonds. They offer higher yield than investment-grade bonds and have the quality of increasing their value, if the issuer's credit rating improves. Also, during liquidation, Junk bondholders get preference over stockholders.