Short-Term Bonds Are Generally

question 31

Multiple Choice

Short-term bonds are generally

• A)less risky than long-term bonds and so they feature higher interest rates.
• B)less risky than long-term bonds and so they feature lower interest rates.
• C)more risky than long-term bonds and so they feature higher interest rates.
• D)more risky than long-term bonds and so they feature lower interest rates.

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Definitions:

Payback Period

The time it takes for an investment to generate an amount of income or cash equal to the cost of the investment.

Initial Cost

The original cost of acquiring an asset, including purchase price and any expenses incurred to put the asset into use.

Cash Inflows

Money or equivalents received by a company during a specific period, which can come from operations, investments, or financing activities.