Which of the following statements is (are) true with respect to catastrophe bonds?
I.The bonds are issued by the U.S. Government.
II.The bonds have relatively high interest (coupon) rates.
A) I only
B) II only
C) both I and II
D) neither I nor II

Question

Quizplus · Accepted Answer

Catastrophe bonds are not issued by the U.S. Government; they are typically issued by insurance companies or special purpose entities to transfer risk. They do offer relatively high interest rates to compensate investors for the risk of losing their principal if a specified catastrophe occurs.

Which of the Following Statements Is (Are) True with Respect