Which of the Following Bonds Would Be Most Attractive to an Investor

question 12

Multiple Choice

Which of the following bonds would be most attractive to an investor who is very concerned about risk?

• A)A real return bond maturing in five years
• B)A government of Canada bond maturing in fifteen years
• C)A government of Canada strip bond maturing in ten years
• D)An AAA rated corporate bond maturing in five years

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Definitions:

Behavioral Contrast

A phenomenon observed in behavioral psychology where a change in conditions leads to an opposite change in the individual's response rate, evident in both positive and negative reinforcements.

Higher-order Conditioning

A form of classical conditioning in which a stimulus is first made meaningful or significant through its association with another conditioned stimulus rather than with an unconditioned stimulus.

Sensitization

An increased reaction to a stimulus following repeated exposure to it, often leading to heightened sensitivity to related stimuli.

Habituation

The process by which an organism reduces its response to a repeated stimulus over time.