13. John is thinking of purchasing a bond because he knows they are low risk.What would be a disadvantage of owning one? ) You must be 21 to purchase a bond. Bonds pay a high return. The issuer can fail to repay the loan. Interest rates can decrease while you own the bond.

Question

13. John is thinking of purchasing a bond because he knows they are low risk.What would be a disadvantage of owning one? ) You must be 21 to purchase a bond. Bonds pay a high return. The issuer can fail to repay the loan. Interest rates can decrease while you own the bond.

Answer 1

The potential disadvantages of owning a bond are options C and D.

Answer 2

## Step 1The problem is asking us to identify a potential disadvantage of owning a bond. A bond is a type of investment where an investor loans money to a company or government for a specified period of time at a fixed interest rate.## Step 2Option A suggests that you must be 21 to purchase a bond. This is not a general rule for all bonds. There are no age restrictions for purchasing bonds.## Step 3Option B suggests that bonds pay a high return. This is not necessarily true. The return on a bond depends on the interest rate and the bond's market price, which can fluctuate.## Step 4Option C suggests that the issuer can fail to repay the loan. This is a potential risk in bond investing. If the issuer defaults on the bond, the investor may not get their initial investment back.## Step 5Option D suggests that interest rates can decrease while you own the bond. This is also a potential risk. If interest rates decrease, the bond's market price may also decrease, which can negatively impact the investor.

Question

13. John is thinking of purchasing a bond because he knows they are low risk.What would be a disadvantage of owning one? ) You must be 21 to purchase a bond. Bonds pay a high return. The issuer can fail to repay the loan. Interest rates can decrease while you own the bond.

Solution

Resposta

Explicação