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

question 2

Multiple Choice

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.

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Definitions:

Affective Computing

The study and development of systems and devices that can recognize, interpret, process, and simulate human emotions.

Cognitive Surplus

The combination of leisure time and the tools to be creative.

Distributed Computing

A computing paradigm in which components spread across multiple systems work on a problem, either in parallel or distributed functions.

Leisure Time

Free time spent away from business, work, and domestic chores, where one can relax, engage in hobbies, or enjoy other activities.