Bonds Enjoy All but One of the Following Advantages

question 139

Multiple Choice

Bonds enjoy all but one of the following advantages.Which is it?

• A)When interest rates drop,bond prices rise.
• B)Bonds may be called when interest rates drop.
• C)They reduce risk through diversification.
• D)Bonds produce steady income.
• E)They can be a safe investment if held to maturity.

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Definitions:

Accrued Interest

Interest that has been earned but not yet paid, often related to bonds or loans.

Upstream Sale

A transaction where a subsidiary sells goods or services to its parent company, affecting intercompany transactions and transfer pricing.

Unrealised Profits

Profits that have been earned but not yet realized through a transaction, such as the increase in value of an investment that has not been sold.