5
QuizMultiple Choice

Buying Bonds

Question 5 • 26-27 Ignite Financial Literacy Personal Finance - EL3403

Which of the following forms of bonds has the least risk?

Answer
A
Municipal Bonds
B
Below-Investment Grade Bonds
C
Corporate Bonds
D
Treasury Bonds

Explanation

Treasury bonds are backed by the U.S. federal government, so they have the lowest risk of default among these choices. Municipal bonds and corporate bonds carry some risk that the issuer may not repay, while below-investment-grade bonds have especially high default risk. Therefore, Treasury Bonds are the least risky choice.

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