Explain Why Some Bond Investors Are Subject to Liquidity Risk,default

question 130

Essay

Explain why some bond investors are subject to liquidity risk,default risk,and/or taxability risk.How do each of these risks affect the yield of a bond?

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Definitions:

Time-projection Exercise

A technique used in planning or therapy where individuals imagine and describe their future in detail.

Emotionally Charged Issues

Topics or subjects that provoke strong emotional reactions and often require sensitive handling.

Discouraged

A feeling of having lost confidence or enthusiasm; demotivated.

Task Group

A collection of individuals assembled to perform a specific set of tasks or achieve certain objectives.