According to an article in the Wall Street Journal , “Companies and governments

Question

According to an article in the Wall Street

Journal ,“Companies and governments [in Europe] are increasingly borrowing at ... terms of up to 100 years”

The article notes that, “That is good news for borrowers, but adds risks for investors”

All of the following are reasons why an investor would buy a bond with such a long maturity, except:

A.

Short-term borrowing costs are decreasing.

B.

Yields on short-term bonds are decreasing.

C.

The long maturity aligns with long-term liabilities.

D.

The bond is less vulnerable to sudden changes in interest rates.

Explanation / Answer

Option d.

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