What Is the Most Important Difference Between a Corporate Bond

question 29

Multiple Choice

What is the most important difference between a corporate bond and an equivalent
Treasury bond?

• A) Corporate bond payments are made by a check from the firm and Treasury bonds are paid by printing money by the government.
• B) Corporate bonds are traded on the floor of New York Bond Market and Treasury bonds trade in the over-the-counter market.
• C) In the case of the corporate bond, the firm has the option to default whereas the government supposedly doesn't.
• D) None of the above.

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