The Following Information Relates to Questions 16-29

question 21

Multiple Choice

The following information relates to Questions 16-29

-The Z-spread of bond A is 1.05% and the Z-spread of bond b is 1.53%. All else equal, which statement best describes the relationship between the two bonds?

• A) bond b is safer and will sell at a lower price.
• B) bond b is riskier and will sell at a lower price.
• C) bond A is riskier and will sell at a higher price.

---

Definitions:

Tariff

A tax imposed by a government on goods and services imported from other countries.

Trucks

Large motor vehicles designed for transporting goods or materials over long or short distances.

Import Tariff

A tax imposed by a government on goods and services imported from other countries, often to protect domestic industries.

Market Outcome

The result of all the buying and selling activities on the market prices, quantities sold, and quantities produced of goods and services.