Which of the following bond buyers did NOT buy the bond that best met his or her objective?
A) Mia wanted a bond with a high interest rate, regardless of the risk. She purchased a junk bond.
B) Anna wanted the least risky bond available. She purchased a federal bond.
C) Bill wanted to purchase a bond that was unlikely to default. He purchased a bond that Standard & Poor's rated a low credit risk.
D) To reduce risk, Toby purchased a bond with a date of maturity far in the future.

Question

Quizplus · Accepted Answer

Toby's choice does not align with his objective of reducing risk. Bonds with longer maturities are generally considered riskier due to their higher sensitivity to interest rate changes, not less risky.

Which of the Following Bond Buyers Did NOT Buy the Bond