Question

In the Ibbotson-Sinquefield studies, long-term corporate bonds have which of the following characteristics?

a) High liquidity
b) Low volatility
c) High returns
d) High credit risk

Answer 1

Long-term corporate bonds have high liquidity, low volatility, high returns, and low credit risk.

Step-by-step explanation:

The Ibbotson-Sinquefield studies found that long-term corporate bonds have the following characteristics:

1. High liquidity: Corporate bonds are relatively easy to buy and sell, making them a liquid investment.
2. Low volatility: Compared to stocks, corporate bonds tend to have less price fluctuation, resulting in lower volatility.
3. High returns: While the returns on corporate bonds are not as high as stocks, they offer higher returns compared to other low-risk investments, such as savings accounts.
4. Low credit risk: Corporate bonds are typically issued by well-established companies with solid credit ratings, which lowers the risk of default.