Which One of the Following Bonds Is Most Apt to Have

question 8

Multiple Choice

Which one of the following bonds is most apt to have the smallest liquidity premium?

• A)Treasury bill
• B)Corporate bond issued by a new firm
• C)Municipal bond issued by the State of New York
• D)Municipal bond issued by a rural city in Alaska
• E)Corporate bond issued by General Motors (GM)

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Definitions:

Government Spends

The total financial expenditures of a government on public services, infrastructure, defense, welfare, and administration.

Insurable Interest

A party who has an interest in property or life.

Beneficiary Payment

A payment made to someone entitled to receive benefits from a legal arrangement or insurance policy.

Whole-life Insurance

A type of permanent life insurance policy that covers the insured's entire lifetime and includes an investment component known as the policy's cash value.