Home › BBA Finance › Financial Management › Bonds and Bond Valuation › Corporate bonds carry more risk than government …
Corporate bonds carry more risk than government bonds because companies cannot:
ARaise taxes
BRaise prices
CRaise capital
DRaise wages
Answer & Solution
Correct answer: A. Raise taxes
1. Governments have that power.
2. Companies must earn the money instead.
3. They cannot raise taxes.
_Source: OpenStax Principles of Finance 2e, Chapter 10, Bonds and Bond Valuation._
Related questions
The yield column of a bond table shows the return an investor gets if the bond is:Coupon rates are always expressed in which terms, even when payments are more frequent?If a 1,000 par bond pays 6% annually in two equal instalments, each payment is:A bond paying 5% on a par value of 1,000 makes an annual coupon payment of:A bond paying 8% on a par value of 1,000 makes an annual coupon payment of:Because bonds are fixed-income investments, they are exposed to risks that can hurt their:Investment-grade bonds are especially popular because many commercial banks and pension fuBonds in the top rating bands are described as: