In General, If We Compare Two Loans or Bonds with the Same

question 29

Multiple Choice

In general, if we compare two loans or bonds with the same loan size and taxability of interest-income, we would expect a higher interest rate on the loan or bond with a

• A) higher risk and longer maturity.
• B) lower risk and longer maturity.
• C) lower risk and shorter maturity.
• D) higher risk and shorter maturity.

---

Definitions:

Low-Cost Producer

A company that can produce and sell goods or services at a lower cost than its competitors.

IFAC's Code of Ethics

A set of ethical standards and guidelines developed by the International Federation of Accountants to promote integrity, objectivity, and professionalism among accountants.

Cost-Benefit Analysis

A decision-making process that compares the costs of an action or investment to the benefits derived, to assess its feasibility or value.

Qualitative Benefits

Non-numerical advantages or positive outcomes resulting from a policy, program, or project, such as improved customer satisfaction or employee morale.