Turner Edwards
11/07/2023 · Middle School
Rank the following kinds of bonds in order from least secure to most secure: Municipal, Corporate, Treasury a. Corporate, Municipal, Treasury b. Treasury, Corporate, Municipal c. Treasury, Municipal, Corporate d. Municipal, Corporate, Treasury
UpStudy ThothAI Solution
Tutor-Verified Answer
Step-by-step Solution
To rank these kinds of bonds from least secure to most secure, we need to consider the credit risk associated with each type of bond. Credit risk is the risk that the issuer will not be able to make the interest payments or repay the principal amount when due.
Here's a brief overview of each type of bond:
1. **Treasury Bonds**: Issued by the U.S. government, these are considered the safest type of bond because they are backed by the full faith and credit of the U.S. government. They have the lowest credit risk.
2. **Municipal Bonds**: Issued by state and local governments, these bonds are generally considered less risky than corporate bonds but more risky than Treasury bonds. They are backed by the taxing power of the issuing government and are often used to fund public projects.
3. **Corporate Bonds**: Issued by corporations, these bonds are riskier than both Treasury and Municipal bonds because they are backed by the financial strength and creditworthiness of the corporation. The risk of default is higher with corporate bonds.
Based on this information, the correct order from least secure to most secure is:
d. Municipal, Corporate, Treasury
This is because Municipal bonds are less secure than Treasury bonds, and Corporate bonds are the least secure of the three.
Quick Answer
d. Municipal, Corporate, Treasury
Answered by UpStudy AI and reviewed by a Professional Tutor
UpStudy ThothAI
Self-Developed and Ever-Improving
Thoth AI product is constantly being upgraded and optimized.
Covers All Major Subjects
Capable of handling homework in math, chemistry, biology, physics, and more.
Instant and Accurate
Provides immediate and precise solutions and guidance.
Try Now
Ask Tutors
Ask AI
10x
Fastest way to Get Answers & Solutions
By text
Enter your question here…
By image
Re-Upload
Submit