Suppose Two Corporate Bonds with Similar Risk Pay Different Rates

question 108

Multiple Choice

Suppose two corporate bonds with similar risk pay different rates of return. The process of arbitrage should

• A) not affect their rates of return.
• B) increase the return on the asset with the higher rate of return as the demand for it increases.
• C) increase the gap between the two rates of return.
• D) eventually equalize their rates of return.

---

Definitions:

Physical Touch

A form of non-verbal communication that involves bodily contact and is important for human bonding and emotional well-being.

Same-Sex Relationships

Romantic or sexual relationships between individuals of the same gender.

Self-Disclosure

The act of revealing personal information to others, which can enhance intimacy and trust in relationships.

Jealous People

Individuals who experience feelings of envy or resentment toward someone due to their achievements, possessions, or perceived advantages.