Answer:
True
Explanation:
It is because the investor will require returns that compensate for the level of risk that is associated with the investment. From the investor’s perspective, the required returns must be lower on less riskier bonds (backed by assets) and higher returns are required on highly risky investments. As debentures are not backed by assets, this means they are highly riskier than bonds that are backed by specific assets. So the required return on debentures would be higher.
