Bonds issued by local and state governments with default risk are____________?
Correct answer: A. Municipal bonds
- A. Municipal bonds
- B. Corporation bonds
- C. Default bonds
- D. Zero bonds
Explanation
Municipal bonds are issued by local or state governments to finance public projects. They can still carry default risk, even though that risk is often lower than for corporate bonds.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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