Isabella is interested only in the rate of interest and is willing to take a great deal of risk in exchange for a high return. Which bond should she look for?
A) federal bonds with short terms
B) provincial bonds with long terms
C) corporate bonds with short terms
D) corporate bonds with long terms

Question

Quizplus · Accepted Answer

Corporate bonds typically offer higher interest rates than government bonds, and longer-term bonds generally offer higher interest rates than shorter-term bonds. Therefore, Isabella should look for corporate bonds with long terms to potentially achieve the highest return, though this may also come with increased risk.

Isabella Is Interested Only in the Rate of Interest and Is