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Which of the Two Bonds in Each Example Would You

question 36

Essay

Which of the two bonds in each example would you expect to generally pay the higher interest rate? Explain why.
a.a German government bond or a South African government bond
b.a 6-month Treasury bill or a 20-year Treasury bond
c.a Microsoft bond or a bond issued by a new recording company


Definitions:

Dormant Commerce Clause

A restriction on states’ authority that is implied in the commerce clause of the U.S. Constitution: The power given to Congress to enact legislation that affects interstate commerce in effect prohibits a state from passing legislation that improperly burdens interstate commerce.

Interstate Commerce

Interstate Commerce refers to the buying, selling, or moving of goods, services, or money across state borders, regulated by the federal government.

Gun-Free School Zone Act

Federal legislation in the United States that prohibits the unauthorized possession of firearms in designated school zones.

Commerce Clause

A provision in the United States Constitution that grants Congress the power to regulate trade between states, with foreign nations, and among Indian tribes.

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