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Are Treasuries like coroporate bonds in that their value fluctuates over the lifetime of the bond? Is the "principal" guaranteed or just the interest?

Yup, treasuries are, essentially, just like corporate bonds. If you wanted to sell a treasury before maturity, the price might go up or down depending on how interest rates have changed (or are expected to change), just like any other bond.

Treasuries are just like any other bond in that there is a promise to pay interest and face value on maturity. The sole difference is that the debtor is the US government, which means that the chance of a default on those bonds is minimal, to say the least. Also, if there is a default on US treasuries, we probably have bigger worries than interest payments on a bond (government collapsing, anarchy, that sort of thing).

Think of treasuries just like other bonds, but with a really secure "company" promising repayment.

-synchronicity
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