7-55 Holding corporate bonds with fixed interest rates involves

Question

Quizplus · Accepted Answer

Holding corporate bonds with fixed interest rates involves default risk, which is the risk that the issuer of the bond may not be able to make interest payments or repay the principal when the bond matures. It also involves interest rate risk, which is the risk that a change in interest rates will affect the value of the bond. Therefore, the correct answer is D, which includes both default risk and interest rate risk.

7-55 Holding Corporate Bonds with Fixed Interest Rates Involves