According to an article in the Wall Street Journal, Companies and governments [in Europe] are increasingly borrowing

Question:

According to an article in the Wall Street Journal, “Companies and governments [in Europe] are increasingly borrowing at … terms of up to 100 years.” The article notes: “That is good news for borrowers, but adds risks for investors.” Why would any investor buy a bond with such a long maturity, given that the investor is unlikely to still be alive when the bond matures? Why might such bonds be considered particularly risky to investors?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Money, Banking, and the Financial System

ISBN: 978-0134524061

3rd edition

Authors: R. Glenn Hubbard, Anthony Patrick O'Brien

Question Posted: