Assume That Interest Rates on 15-Year Noncallable Treasury and Corporate $\begin{array}{ll}\text { T-bond }=7.72 \% & \mathrm{~A}=9.64 \% \\\mathrm{ALA}=8.72 \% & \mathrm{BBB}=10.18 \%\end{array}$

question 84

Multiple Choice

Assume that interest rates on 15-year noncallable Treasury and corporate bonds with different ratings are as follows: $\begin{array}{ll}\text { T-bond }=7.72 \% & \mathrm{~A}=9.64 \% \\\mathrm{ALA}=8.72 \% & \mathrm{BBB}=10.18 \%\end{array}$ The differences in rates among these issues were most probably caused primarily by:

• A) Tax effects.
• B) Default risk differences.
• C) Maturity risk differences.
• D) Inflation differences.
• E) Real risk-free rate differences.

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Wilderness

Natural, undeveloped land areas remaining untouched by significant human activities, often valued for their ecological purity and beauty.

English Colonization

The process of establishing settlements and asserting control over regions by the English, particularly in America, during the 16th to 19th centuries.

Spanish Colonization

The period in history when Spain expanded its territory across large areas of the Americas, the Pacific, and parts of Asia, beginning in the late 15th century.

Racial Formation

The sociohistorical process by which racial categories are created, inhabited, transformed, and destroyed.