13 The risk to holding bonds comes from the fact that a the

13. The risk to holding bonds comes from the fact that: a, the bond issuer may default on the interest and/or principle of the bond b. changes in the market rate of interest will change the market value of the bond. c. inflation may erode the true value of the bond over time. All of the above contribute to the risk of holding bonds. e. none of the factors listed above are related to bond risk

Solution

Answer 13 d)

All the three statements mentioned are absolutely correct.

These three are the reasons of Risk of holding bonds.

The market value of bondserode with time due to inflation plus there is a risk of default of the issuer and also that changes in market rates affect thE value of the bonds we hold.