How Is the Risk Involved in Purchasing Bonds Affected by the Bond's

question 23

Multiple Choice

How is the risk involved in purchasing bonds affected by the bond's maturity date?

• A) The sooner the maturity date, the greater the rate of return is on the bond.
• B) The further the maturity date, the less likely a bondholders' claim will be filed.
• C) The sooner the maturity date, the lower the initial offering price of the bond.
• D) The further the maturity date, the greater the chance for unforeseen circumstances that affect the bond.
• E) The sooner the maturity date, the greater the chance for significant market changes that affect the bond.