The higher the risk associated with a bond issue, the ________ the interest rate the organization must offer investors.

Question

Quizplus · Accepted Answer

When the risk associated with a bond issue is higher, investors require a higher return to compensate for the increased risk. This means that the organization must offer a higher interest rate to attract investors to purchase their bond. Therefore, the answer is A) higher.

The Higher the Risk Associated with a Bond Issue, the ________