12 Risks of investing in bonds The higher the risk of a secu

12. Risks of investing in bonds The higher the risk of a security, the higher its expected return will be. A bond\'s risk level is reflected in its yield, but understanding the different risks involved when investing in bonds is important. The following graph shows the relationship between interest rates and maturity for three security classes: U.S. Treasury securities, AA-rated corporate bonds, and BBB-rated corporate bonds.

Solution

A - treasury

B - AA rated corp bonds

C- BBB- rated corp bonds

less, rise

30 year 10%coupon bond