Which of the Following Factors Could Explain Difference in Yields

question 54

Multiple Choice

Which of the following factors could explain difference in yields on bonds with the same time to maturity?

• A) the risk that the issuer will not make future payments
• B) differences in the taxation of the bonds
• C) ease of finding buyers and sellers of a bond
• D) all of the above

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Definitions:

Statute of Frauds

A legal principle requiring certain contracts to be in writing and signed by the parties involved, ensuring enforceability.

Unconscionable

Refers to actions or terms in contracts that are so unfair or oppressive to one party that no reasonable or informed person would agree to them.

Contract Provision

A specific clause, term, or condition outlined within a contract that specifies obligations, rights, or restrictions.

Court

An institution that has the authority to make decisions on various types of disputes and legal matters, often comprising judges and following a set system of laws.