Final answer:
Bonds can differ in terms of their rating, issuer, and coupon amongst other characteristics; Bond details like the issuer's creditworthiness are assessed through ratings, and the coupon indicates the interest paid to bondholders, which is influenced by market interest rates.
Hence the correct answer is 'b. all of the above'.
Step-by-step explanation:
Bonds can differ by rating, issuer, coupon, and other factors. Therefore, the correct option in both the parts of the question provided would be b. all of the above.
A bond is a form of debt security under which the issuer owes the bondholders a debt and must pay them interest (known as the coupon) and repay the principal at a later date, called the maturity date. Issuers of bonds can be various entities including governments, municipalities, and corporations. The rating of a bond is an assessment of the creditworthiness of the issuer, given by rating agencies such as Moody's or Standard & Poor's, impacting the perceived risk and the interest rate of the bond.
Furthermore, the coupon refers to the interest rate that the issuer pays to the bondholders, which can be affected by various factors including prevailing interest rates. A bond with a fixed coupon rate will become more attractive if interest rates decline, and less attractive if they rise. For instance, if a bond is issued with a 5% rate when interest rates are similarly at 5%, and subsequently, interest rates fall to 3.5%, the bond's 5% payout becomes more appealing to investors.