Question

Investing in bonds Most people believe that bonds are low risk investments. What do you think?

Investing in bonds Most people believe that bonds are low risk investments. What do you think?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Bonds are financial instruments in which the lender promises to pay the principal and interest as per terms of Bond instrument to the buyer or investor. Normally the time period of the bond is defined and has the following characteristics.

  • The principal of bond value is paid at end of the term
  • The interest is paid as per terms of bond instrument which can be quarterly , half yearly or yearly

The bonds if issued by government agencies are considered as low risk investment as the chances of default risk is low. Which means the inability of lender to pay the amount on maturity is very low in case of government agencies

The default risk in case of private ltd companies or whose credit rating is low is high and becomes a high risk investment

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Do you think most people in the US meet their protein requirement? Or, do you think...
Do you think most people in the US meet their protein requirement? Or, do you think it’s a nutrient that’s commonly deficient? Do you think the amount of protein present in most Americans diet should change?
What do you think are the most important reasons for low public trust in government? How...
What do you think are the most important reasons for low public trust in government? How could public trust in government be increased?
Why do you think most white people exaggerate the minority population of this country. Do you...
Why do you think most white people exaggerate the minority population of this country. Do you think people tend to see race in terms of biological traits or as categories constructed by society?
Why do you think people believe coconut oil is health? Why does the media play such...
Why do you think people believe coconut oil is health? Why does the media play such a strong role in this?
income from investing in municipal bonds is generally exempt from federal and state taxes. do you...
income from investing in municipal bonds is generally exempt from federal and state taxes. do you think this incentivizes people in high or lower tax brackets to buy them? why?
A main argument for investing in US securities is the: Multiple Choice low risk of owning...
A main argument for investing in US securities is the: Multiple Choice low risk of owning them. varied time frame of payment for different types of securities. low rate of interest high rate of interest. Over the two decades leading up the 2008 crisis, __________ interest rates meant that consumers could take on _____ debt without significantly increasing the amount of debt service they had to pay. Multiple Choice falling; more falling; less rising; more rising; less The sudden explosion...
When we talk about investing, the first thing that comes to mind for most people are...
When we talk about investing, the first thing that comes to mind for most people are stocks and bonds. However, their are many investing vehicles available. If you were told that you could select only one investment vehicle, what would it be and why?
Which defense mechanism do you see people exhibiting most frequently? Why do you think these mechanisms...
Which defense mechanism do you see people exhibiting most frequently? Why do you think these mechanisms are used? How can you manage this type of reaction to a conflict?
If most people are rational, why do you think they ail to diversify properly? In particular,...
If most people are rational, why do you think they ail to diversify properly? In particular, why do they fail to include foreign securities in their portfolios? Explain and eloborate in detail
Question 1: What group of people do you think labeling theory impacts the most and how...
Question 1: What group of people do you think labeling theory impacts the most and how does it affect them? Question 2: Labeling theory in the world of cyber crime suggests that labeling particular groups as deviant may lead to an increase in the number of crimes committed. In essence, labeling fuels more crime as it encourages the perpetrator to continue. Do you think it is possible to reduce crime levels by reducing social shaming? Why or why not?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT