Which one of the following bonds would likely have the lowest risk?

Question

Quizplus · Accepted Answer

Treasury bills are issued by the government and are considered to have the lowest risk of default. They have a short-term maturity and their interest rate is generally lower than other types of bonds. Municipal bonds are issued by local governments and their risk level depends on the fiscal health of the issuing government. Corporate bonds are issued by companies and have a higher risk of default than government-issued bonds. Government agency bonds are issued by agencies such as Freddie Mac and Fannie Mae and while they are considered to have a lower default risk than corporate bonds, they still have a higher risk than treasury bills. Junk bonds are high-yield bonds that are issued by companies with poor credit ratings and are considered to be the riskiest type of bond investment.

Which One of the Following Bonds Would Likely Have the Lowest