Your Uncle Would Like to Restrict His Interest Rate Risk

question 58

Multiple Choice

Your uncle would like to restrict his interest rate risk and his default risk,but he still would like to invest in corporate bonds.Which of the possible bonds listed below best satisfies your uncle's criteria?

• A) AAA bond with 10 years to maturity.
• B) BBB perpetual bond.
• C) BBB bond with 10 years to maturity.
• D) AAA bond with 5 years to maturity.
• E) BBB bond with 5 years to maturity.

---

Definitions:

Personal Distress

Emotional pain and suffering typically stemming from personal difficulties, challenges, or traumatic events, affecting one's mental health.

Medical Model

The Medical Model is a theory of health which treats mental and physical conditions as medical diseases to be diagnosed, treated, and cured by medical means.

Bizarre Behavior

Unusual or odd actions that are typically out of context and cannot be easily understood by others.

Personal Distress

A self-focused, negative emotional reaction to the distress of others, which can sometimes impede the ability to help them effectively.