Corporate Bonds
Which type of bond has NO reinvestment risk?
Zero-coupon bonds have no reinvestment risk because they pay no periodic interest. There are no coupon payments to reinvest at potentially lower rates. All return comes from the difference between the discounted purchase
Complete Analysis & Legal Rationale
Zero-coupon bonds have no reinvestment risk because they pay no periodic interest. There are no coupon payments to reinvest at potentially lower rates. All return comes from the difference between the discounted purchase price and par value at maturity.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing securities rule described in the explanation.
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.