What is the importance of knowing the difference between an investment-grade and non-investment-grade bond?

I. Investment-grade bonds always pay all interest payments on time, whereas most non-investment-grade bonds do not

II. To enable bond mutual fund buyers to have a better sense of the risk level of the fund

III. Certain organizations and endowments are prohibited from buying non-investment-grade bonds

IV. The price of investment grade bonds is always higher than that of non-investment-grade bonds

Multiple Choice

• All of them

• I, II, and III only

• II, III, and IV only

• II and III only

• III and IV only