Which of the following financial market securities would probably pay the lowest interest rate?
A) A bond issued by a start-up company
B) A government bond issued by the government of France.
C) A bond issued by a blue chip company
D) An investment fund with a portfolio of corporate bonds issued by blue chip companies.

Question

Quizplus · Accepted Answer

Government bonds are considered to be the safest investment and have a low default risk, so they typically have lower interest rates than bonds issued by start-up companies or even blue chip companies. An investment fund that invests in corporate bonds issued by blue chip companies may have higher interest rates than a government bond, but it will likely have a higher risk as well.

Which of the Following Financial Market Securities Would Probably Pay