Which of the following bonds would you expect to pay the highest interest rate?
A)a bond issued by the federal government
B)a bond issued by Bombardier
C)a bond issued by Manitoba
D)a bond issued by a new restaurant chain

Question

Quizplus · Accepted Answer

Bonds issued by a new restaurant chain would be considered high-risk investments because the chain has no established track record of financial stability. Therefore, investors would demand a higher interest rate to compensate for the increased risk of default.

Which of the Following Bonds Would You Expect to Pay