All else being equal, a company is going to issue $$10$ million in debt, to be paid back over $10$ years. Which payment structure would have the lowest default risk:

A$.$ a fixed payment loan.

B$.$ a coupon bond.

C$.$ a zero$-$coupon bond.

A$.$

because it is the same company, same borrowed amount, and same repayment period, the default rate is the same on all these bonds.

B$.$

a coupon bond

C$.$

a fixed payment loan

D$.$

a zero$-$coupon bond