The Interest Rate on a AAA Rated Government Treasury Bond

question 158

Multiple Choice

The interest rate on a AAA rated government treasury bond is 3.5%.A secured corporate bond is likely to pay:

• A)The same as the treasury bond.
• B)Less than the treasury bond.
• C)More than the treasury bond.
• D)The same as the treasury bond,but with a shorter maturity date.

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Definitions:

Marginal Returns

Marginal Returns refer to the additional output or benefit received from increasing one unit of a particular input while keeping other inputs constant.

Marginal Cost

The incremental cost associated with the production of an extra unit of a product or service.

Marginal Cost Curve

A curve that displays the additional cost associated with producing one more unit of output, typically showing how marginal cost changes with changes in production volume.

Total Cost Curve

A graph that shows the total cost incurred by a firm in the production of goods or services at different levels of output.