Which bond would you expect to pay the highest interest rate?
A) a bond issued by the federal government
B) a bond issued by CN Railway
C) a bond issued by Manitoba
D) a bond issued by a new clothing chain

Question

Quizplus · Accepted Answer

A bond issued by a new clothing chain is likely to pay the highest interest rate because it is considered riskier compared to bonds issued by the federal government, CN Railway, or Manitoba. Investors demand higher interest rates for taking on more risk.

Which Bond Would You Expect to Pay the Highest Interest