Corporate bonds are less risky if they are ________ bonds and municipal bonds are less risky if they are ________ bonds.

Question

Quizplus · Accepted Answer

Secured bonds are less risky than unsecured bonds because they are backed by specific assets that can be liquidated if the company or municipality defaults on the bond. General obligation bonds are less risky than revenue bonds because they are backed by the full faith and credit of the issuer, meaning they are obligated to use all available resources to repay the bondholders. Revenue bonds are backed only by the revenue generated by a specific project, such as a toll road or hospital, so their repayment depends on the success of that project.

Corporate Bonds Are Less Risky If They Are ________ Bonds