Not all bonds are the same. There are types of issuers with its associated varying levels of risk an

3. Municipal Bonds: Issued by states or other local governments-they are commonly known as "monies." Even though these bond issues finance many public works projects-schools and highways, for instance, these in themselves are attractive because the interest you earn from them is tax-free.
4. Junk Bonds: These are issued by firms having poor credit ratings. Due to higher returns associated with them they are even more prone to defaults.
5. International bonds: Such as those issued by countries and international organizations and thus have more diversified portfolios but issues of currency exchange, and sometimes lack of political stability in these transnational corporations.