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Treasury Bonds Typically Have Lower Coupon Rates Than Corporate Bonds

Question 21

Multiple Choice

Treasury bonds typically have lower coupon rates than corporate bonds because


A) The U.S.Treasury does not earn profits.
B) There is a lower risk that the U.S.Treasury will default.
C) Government regulations keep interest rates on Treasury bonds below market rates.
D) The opportunity cost of purchasing Treasury bonds is lower than the opportunity cost of buying corporate bonds.

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