Question

why is a bond with a higher interest rate often considered a higher risk investment? a. more secure bonds have higher interest rates. b. a higher interest rate means a higher rate of return on the investment. c. a higher interest rate would provide too much of a return on the investment. d. some companies promise higher interest rates in order to attract the attention of investors. please select the best answer from the choices provided

Explanation:

In the finance sub - field of business, risk and return are related. Companies with higher risk profiles offer higher interest rates on bonds to attract investors as they are less secure. More secure bonds usually have lower interest rates. A higher interest rate is a compensation for taking on more risk.

Answer:

D. Some companies promise higher interest rates in order to attract the attention of investors.