Final answer:
Government bonds are low-risk investments offering stability and security in returns, making them a reliable choice for risk-averse investors.
Explanation:
Government bonds are considered low-risk investments because the government is highly likely to repay the bond, even though the interest rate may be low. They are viewed as safe assets due to the government's reliability in honoring them.
Bonds offer a tradeoff between risk and return, where lower risk investments like government bonds tend to offer lower returns compared to riskier options such as stocks. Investors opt for government bonds for stability and security in their investment portfolio.
Investing in government bonds can provide a sense of security and certainty, making them a favored choice for risk-averse investors looking for stable returns over time.
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