Stephanie 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 of the following bonds should she look for?

Question

Quizplus · Accepted Answer

Corporate bonds with long terms often have higher interest rates and carry a higher risk. This matches Stephanie's desire for a high return in exchange for taking on more risk. Short-term bonds, whether federal or corporate, generally have lower interest rates. Provincial bonds may have a slightly higher interest rate, but they still may not be as high as long-term corporate bonds. Therefore, D) corporate bonds with long terms is the best choice for Stephanie.

Stephanie Is Interested Only in the Rate of Interest and Is