Bonds are risky because of: a. Default risk: the risk that the issuer may fail to pay.

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Bonds are risky because of:

a. Default risk: the risk that the issuer may fail to pay.

b. Inflation risk: the risk that the inflation rate may be more or less than expected, affecting the real value of the promised nominal payments.

c. Interest rate risk: the risk that the interest rate may change, causing the bond’s price to change.

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Money Banking And Financial Markets

ISBN: 9781260226782

6th Edition

Authors: Stephen Cecchetti, Kermit Schoenholtz

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Question Posted: Mar 21, 2024 02:01 AM

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Bonds are risky because of: a. Default risk: the risk that the issuer may fail to pay.

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Your statement accurately identifies three significant risks associated with bonds a Default risk Default risk refers to the risk that the issuer of t...View the full answer

Money Banking And Financial Markets

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