Bond funds: a) Will lose all value if a single bond defaults b) Are investment bargains because their price is so low c) Are ris
kier than owning individual corporate bonds d) Spread the risk of individual bonds by collectively owning more and less-risky bonds, with higher and lower rates of return
Spread the risk of individual bonds by collectively owning more and less-risky bonds, with higher and lower rates of return
Explanation:
A bond fund is a pooled investment vehicle that invests in various types of bonds. the types of bonds invested in includes cooperate bonds, government bonds and municipal bonds.
The primary objective of bond funds is to generate revenue for investors
Because bond fund is an aggregation of various types of bonds, the risk of the bond fund is lower than the risk of holding any corporate bonds. This is because risks are spread.
