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Assume That Interest Rates on 20-Year Treasury and Corporate Bonds

Question 2

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Assume that interest rates on 20-year Treasury and corporate bonds with different ratings, all of which are noncallable, are as follows:
Assume that interest rates on 20-year Treasury and corporate bonds with different ratings, all of which are noncallable, are as follows: The differences in rates among these issues were most probably caused primarily by: A) Real risk-free rate differences. B) Tax effects. C) Default risk differences. D) Maturity risk differences. E) Inflation differences.
The differences in rates among these issues were most probably caused primarily by:


A) Real risk-free rate differences.
B) Tax effects.
C) Default risk differences.
D) Maturity risk differences.
E) Inflation differences.

Correct Answer:

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