Why Are the Interest Rates of Treasury Bonds Less Than

question 43

Multiple Choice

Why are the interest rates of Treasury bonds less than the interest rates of equivalent corporate bonds?

• A) Treasury bonds are widely regarded to be risk-free.
• B) The Australian government has a high credit spread.
• C) Treasury bonds are generally used to determine interest rates.
• D) There is significant risk that the Australian government will default.

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Definitions:

Products and Services

The combination of physical goods and intangible activities that fulfill customer needs and wants.

Balance of Trade

The difference between a country's exports and imports of goods over a certain period, indicating the economic health of a nation.

Monetary Value

The worth of a good, service, or asset expressed in terms of money; often determined by market forces.

Difference

The distinct characteristic or aspect that sets something apart from others.