Michael interviewed a representative from an investment company the other day. The representative explained to him how a corporate bond works. He stated that a bond has a finite life (maturity); pays the investor an interest payment every 6 months until it the bond matures; and on top of that, the face value of $1,000 is returned to the investor upon maturity. Michael walked away from the interview thinking that if all his money is contractually guaranteed to him, a bond has no risk --Everyone should invest in bonds! Is Michael right in his thinking?