Which bond would you expect to pay the highest interest rate?

Question

Quizplus · Accepted Answer

Bonds issued by new high-tech companies typically have a higher risk of default, as these companies are not yet established in their industry. Therefore, bondholders require a higher interest rate to compensate for the risk. The other options (federal government, Royal Bank of Canada, and province of Ontario) are considered low-risk issuers and therefore offer lower interest rates.

Which Bond Would You Expect to Pay the Highest Interest