Which of the Following Statements Concerning Bonds and Risk Is

question 41

Multiple Choice

Which of the following statements concerning bonds and risk is true?

• A) Because the interest payments and maturing value are known, the only risk associated with investing in bonds is default risk.
• B) Zero coupon bonds are always more risky than bonds with high coupon rates because of the time value of money.
• C) Bonds are generally less risky than common stock because of the preference for debt over equity in the event of bankruptcy and liquidation.
• D) B-rated bonds are above average for risk, i.e., less risky than the average bond.

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Definitions:

Habitual Negligence

Consistently failing to exercise a reasonable standard of care, resulting in repeat harm or damage.

Serious Absenteeism

refers to a consistent pattern of being absent from work or obligations without valid reason, often signaling deeper issues like employee dissatisfaction or personal problems.

Wrongful Dismissal

The termination of an employee's contract of employment in violation of the law or the terms of the contract itself.

Severance Pay

Financial compensation awarded to an employee upon termination of employment, typically based on length of service or contractual agreement.