An article in the Wall Street Journal made the following comment on the surge in corporations selling long-term bonds in 2012: “For investors, the longer maturities provide better returns than shorter-term debt without the default worries associated with the high-yielding debt of some of Europe’s troubled economies.”

a. Are investment-grade corporate bonds free of default risk? Briefly explain.

b. Is default risk the only type of risk that investors in these bonds should be concerned about? Briefly explain.