If You Have a Very Low Tolerance for Risk,which of the Following

question 10

Multiple Choice

If you have a very low tolerance for risk,which of the following bonds would you be least likely to hold in your portfolio?

• A)a U.S. Treasury bond
• B)a municipal bond
• C)a corporate bond with a rating of Aaa
• D)a corporate bond with a rating of Baa

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Definitions:

Profitability Ratio

Financial metrics that are used to assess a business's ability to generate income relative to its revenue, assets, or equity.

Solvency Ratio

Solvency Ratio indicates a company's ability to meet its long-term debts and obligations, measuring the size of its after-tax income relative to its liabilities.

Current Ratio

A financial ratio indicating how well a company can settle short-term debts using its current assets.

Acid-test Ratio

A financial metric that measures a company's ability to pay off its short-term liabilities with its quick assets including cash, marketable securities, and receivables.