Michael is looking for an investment that will pay a little better than what he can get from a government bond. You suggest that he consider a new issue of debenture bonds by Leafy Greens that pay 7.5% annually. You explain that Leafy Greens has been in business a long time, and the debenture feature makes these bonds more secure than others.

Question

Quizplus · Accepted Answer

Debenture bonds are unsecured bonds. Unsecured bonds usually carry a higher interest rate to compensate for the added risk that the investor is taking.

Michael Is Looking for an Investment That Will Pay a Little