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


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


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


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


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

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