Question

Treasury Bonds are generally considered safer than Corporate bonds. Yet both types of fixed income instruments are subject to some sources of risk. Which sources of risk typically affect the price of domestic Corporate Bonds more than Treasury Bonds.

Answer 1

Answer: Liquidity risk and Default risk.

Step-by-step explanation:

The sources of risk that affect the price of domestic Corporate Bonds more than Treasury Bonds are the liquidity risk and the default risk.

Treasury bonds are referred to as the government debt securities that typically have more than 20 years of maturity and earn periodic interest until they mature. Corporate bond is the bond that is issued by a corporation.

Corporate bonds typically offer list risk which is why they pay high yields this they've more default risk than the treasury bonds.