Which of the Following Risks Would Not Be Faced by Investors

question 88

Multiple Choice

Which of the following risks would not be faced by investors in domestic bonds?

• A) credit (or default) risk
• B) interest rate risk
• C) reinvestment rate (or rollover) risk
• D) exchange rate risk

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Definitions:

Bond Dissociation Energy

The energy required to break a specific chemical bond in one mole of gaseous molecules.

Homolytically

Referring to homolytic cleavage, a process where a chemical bond is evenly split and each of the bonded atoms retains one of the shared electrons.

ΔS°

Represents the standard entropy change of a reaction, indicating the variation of randomness or disorder in a system at standard conditions.

Combustion

A chemical reaction where a substance combines with oxygen to release heat and often light.