Bonds are 100 risk free investments Do you agree with this-02137
This subjective question is related to the book/course
vu mgt603 Strategic Management.
It can also be found in
vu mgt603 Mid Term Solved Past Paper No. 1.
Question 1: Bonds are 100% risk free investments. Do you agree with this statement. Justify your answer in either case.
Answer:
Bonds are less risky than the equity but it doesn't meant its risk averse bonds investment are default risk as well as the interest rate risk.
Government bonds are usually referred to as risk-free bonds, because the government can raise taxes or create additional currency in order to redeem the bond at maturity.
