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Which of the following is NOT true about bonds? (Select all that apply) A: The maturity value of a bond is the initial investment plus interest. B: Bonds have regularly scheduled interest payments. C: You cannot lose your money when purchasing a bond. D: The higher the default risk of a bond, the higher its coupon rate. E: Bonds are more stable investment than stocks. F: Corporate bonds have lower risk of default than government bonds

Respuesta :

Answer:

A. The maturity value of a bond is the initial investment plus interest

C. You cannot loose your money when purchasing bond.

Explanation:

Bond is a fixed income security which which is otherwise a loan to a company or government that pays back a fixed rate of return. Bonds are usually lent by investors to borrowers and also traded through brokers. Bonds are mostly used by companies or corporations to grow their businesses, finance and execute projects ; states and independent governments to finance infrastructures, operations and certain projects.

With regards to the above, the odd is that the maturity value of a bond is the initial investment plus interest. For some investments like fixed deposits/certificate of deposits and other investments, their interest plus principal are paid at maturity, unlike bonds that have regularly scheduled interest payments hence for most bonds, the maturity value is the face amount of the bond.

Another odd option is that you cannot loose your money when purchasing bond. This is not true because one can loose money if the bond is sold at an amount lesser than what one paid or the issuer defaults on their payments.

When it comes to bonds, the things that are not true include:

  • C: You cannot lose your money when purchasing a bond.
  • F: Corporate bonds have lower risk of default than government bonds

Why are the above not true?

Bonds are lower in terms of riskiness when compared to stocks but they are not completely risk free. One can still lose their money on them.

Corporate bonds are also known to have a higher risk of default than government bonds because government bonds are backed by the government.

Find out more on bonds at https://brainly.com/question/2516675.