Which Bond Provision Would Be Considered the Most Risky for an Investor

question 64

Multiple Choice

Which bond provision would be considered the most risky for an investor who is concerned that market interest rates will drop dramatically over the life of the bond?

• A) Sinking fund
• B) Deferred call
• C) Freely callable
• D) Non-callable
• E) None of the above

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Definitions:

Dissociation

A mental process that causes a lack of connection in a person's thoughts, memory, and sense of identity.

Repression

A psychological defense mechanism where unpleasant thoughts, memories, or desires are pushed from the conscious mind into the unconscious.

Autobiographical Memories

Remembered events and experiences that are personal, and form a narrative about one's life.

Episodic Memory

A type of long-term memory that involves the recollection of specific events, situations, and experiences, including the context and emotions associated with them.