Which Bond Provision Would Be Considered the Riskiest for an Investor

question 40

Multiple Choice

Which bond provision would be considered the riskiest for an investor who is concerned that market interest rates will drop dramatically over the life of the bond?

• A) sinking fund
• B) deferred call
• C) freely callable
• D) non-callable
• E) None of these are correct.

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Definitions:

Optimal R&D

The most efficient allocation of resources towards research and development activities to maximize innovation and return on investment.

Expenditures

The act of spending money or utilizing resources for various purposes, including paying for goods, services, or obligations.

Expected-Rate-Of-Return

The forecasted percentage gain or loss that an investment is anticipated to generate over a specified period.

Average Total Cost

the cost per unit is calculated by dividing the entire production cost by the quantity of units produced.