UNIT $3-$ MILESTONE $3$

$1$

$2$

$3$

$4$

$5$

$$

Rohan decides to invest in bonds instead of stocks because he has heard that bonds are a lower$-$risk investment. He uses the bond's credt rating to make his investment decisions.

What statement is TRUE regarding Rohan's investment risk?

The bond issuer may not pay him back because it may go bankrupt or become insolvent.

The credit ratings of the bond$-$issuing companies will not change from one year to the next.

If Rohan chooses bonds from a company with low credit ratings, he's almost certain to have a low default rick.

The bonds' value is not affected by inflation because most bonds pay a fixed coupon rate over time.

$$

$0$

$647$

Cloudy

Search