📊 Part 1: Understanding Investment Bonds

1. What is an investment bond?

A loan you give to a company or government

A type of savings account

A share in a company

A type of insurance policy

2. Which of these are features of investment bonds? (Select all that apply)

Fixed interest rate

Maturity date

Guaranteed dividends

Regular interest payments

3. Government bonds are generally considered:

High risk, high return

Low risk, low return

Medium risk, high return

No risk, no return

4. Fill in the blanks:

When you buy a bond, you become a __________ to the issuer. The bond will pay you __________ at regular intervals and return your __________ at maturity.

💷 Part 2: Bond Calculations

5. Sarah buys a £1,000 government bond with a 3% annual interest rate. How much interest will she receive each year?

Answer: £__________

6. A corporate bond has a face value of £5,000 and pays 4.5% interest annually. Calculate:

a) Annual interest payment: £__________

b) Total interest over 5 years: £__________

7. Explain why corporate bonds typically offer higher interest rates than government bonds:

🎯 Part 3: Investment Decision Making

8. Compare these two investment options and explain which you would choose for a risk-averse investor:

Option A: 10-year government bond, 2.5% annual interest

Option B: 5-year corporate bond, 5.5% annual interest

9. Extension Activity: Research and explain one advantage and one disadvantage of investing in bonds compared to shares:

Investment Bonds Worksheet

Investment Bonds Worksheet

📊 Part 1: Understanding Investment Bonds

💷 Part 2: Bond Calculations

🎯 Part 3: Investment Decision Making

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