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Risks of Investing in Bonds

CORPFN-1GJGEL

Which one of the following statements concerning bonds and risk is TRUE?

A

As coupons and maturity are known, the only risk associated with investing in bonds is default risk.

B

Zero coupon bonds are always more risky than high coupon bonds because of the time value of money.

C

Bonds are generally less risky than stock because of the preference for debt over equity in the event of bankruptcy.

D

B rated bonds are of average risk, so they are less risky than the average bond.