Which One of the Following Features of Corporate Bonds Has

question 109

Multiple Choice

Which one of the following features of corporate bonds has the greatest appeal to pension fund investors?

• A)call provision
• B)convertible provision
• C)zero repayment risk
• D)prospectus availability
• E)predictable cash flows

---

Definitions:

Capital Asset Pricing Model

A model that describes the relationship between systematic risk and expected return for assets, particularly stocks, suggesting that the expected return on an investment is related to its risk level.

Portfolio Variance

A measure of the dispersion of returns of a portfolio from its mean, indicating the level of investment risk.

Portfolio Beta

A measure of the sensitivity of a portfolio's returns to market returns, representing its relative market risk.