If you have a very low tolerance for risk,which of the following bonds would you be least likely to hold in your portfolio?
A)a U.S. Treasury bond
B)a municipal bond
C)a corporate bond with a rating of Aaa
D)a corporate bond with a rating of Baa

Question

Quizplus · Accepted Answer

Of the options given, a corporate bond with a rating of Baa represents the highest risk due to its lower credit rating. Therefore, if you have a very low tolerance for risk, you would be least likely to hold this bond in your portfolio. A U.S. Treasury bond is considered the lowest risk as it is backed by the full faith and credit of the U.S. government. A municipal bond also has lower risk as it is issued by a state or local government and is typically used for financing public projects. A corporate bond with a rating of Aaa represents a slightly higher level of risk compared to a U.S. Treasury bond or municipal bond but is still considered investment-grade and relatively low risk.

If You Have a Very Low Tolerance for Risk,which of the Following