1. Bonds are completely risk-free investments.
2. Interest rate risk refers to the possibility that bond prices will decline due to rising interest rates.
3. Credit risk is the risk that a bond issuer will default and be unable to make payments.
4. Bonds with lower credit ratings are considered safer investments.
5. Bonds are less sensitive to interest rate changes than stocks.
6. Inflation risk can erode the real value of a bond's interest payments and principal.
7. Bonds with longer maturities are more exposed to interest rate risk.
8. One way to reduce bond risk is to diversify your bond investments across different issuers and sectors.
9. Treasury bonds are generally considered to have higher credit risk than corporate bonds.
10. Bonds are typically riskier than stocks in terms of price volatility.
11. Callable bonds carry the risk that the issuer might redeem the bond before maturity, usually when interest rates fall.
12. Bonds with higher yields generally have higher risk.
13. Inflation-protected bonds like TIPS protect investors from inflation risk.
14. Credit ratings are not useful in assessing bond risk.
15. Duration is a measure of a bond’s sensitivity to interest rate changes.
16. Shorter duration bonds are more sensitive to interest rate changes than longer duration bonds.
17. Bondholders are less exposed to credit risk than stockholders.
18. Rising inflation increases the real value of a bond’s interest payments.
19. Diversification across different bond types can help reduce overall bond risk.
20. Bonds are immune to market risk.