Question

reasons why people will prefer corporate bonds to government bonds in times of a pandemic

Answer 1

The reasons for preferring government bonds are:

*The default risk on government bonds is 0. But, in times of panic situations [caused by pandemic] the best of corporate bonds would also have higher default risks.

*Liquidity risk will be higher for corporate bonds in times of pandemic situation

*Interest rate risk and price risk. The interest rate [market] for the corporate bonds would go down pushing down the prices further and further. The market rate for government bonds would not decline as in the case of corporate bonds.

*In such situations one will not know when it will end. Hence, investors would become overcautious.