SIE practice questionmediumCorporate Bonds
Which of the following most accurately describes the primary risk associated with investment-grade corporate bonds?
- ACredit risk✓ Correct answer
- BLiquidity risk
- CPolitical risk
- DCurrency risk
Explanation
Why A — Credit risk
Even investment grade bonds are subject to the risk the issuer will default (credit risk). Liquidity may be a lesser concern; political and currency risk are generally not factors for U.S. issuers.
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