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In Australia, the Federal and State governments can raise funds by issuing bonds. Please explain in...

In Australia, the Federal and State governments can raise funds by issuing bonds. Please explain in detail the benefits for investors of investing these bond.

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Answer #1

Benefits of investing these bonds are
1. These bonds are practically default free as the federal and state government has taxation power.
2. These bonds have tax exemption on the interest. Hence the effective yield of these bonds are more than other risky investments.
3. Since these bonds are rated the risks involved will also be known to the investors

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