Final answer:
Most corporate and municipal bonds pay interest semi-annually. Corporate bonds usually offer a higher interest rate compared to Treasury bonds due to the higher risk associated with companies over government borrowing. Option c.
Step-by-step explanation:
Most corporate and municipal bonds pay interest to the bondholders on a semi-annual basis. This means that interest payments are typically made twice a year to investors. In contrast, other schedules like monthly, quarterly, or annually are less common for these types of bonds.
Corporate bonds, in particular, issued by firms and rated by independent firms like Moody's, tend to provide a higher interest rate than Treasury bonds because firms are considered riskier borrowers compared to the federal government. Therefore, corporate bonds yield higher returns to compensate for the increased risk.
Bonds are financial contracts that specify the borrowed amount, the repayment amounts based on the interest rate at issuance, and the duration until the full repayment is due.
They play a critical role in the financial strategy of companies, governments, and investors, offering various investment opportunities with different risk and return profiles. So option c.