Other Things Being Equal, the Yield Required on A-Rated Bonds

question 32

Multiple Choice

Other things being equal, the yield required on A-rated bonds should be ____ the yield required on B-rated bonds whose other characteristics are exactly the same.

• A)greater than
• B)equal to
• C)less than
• D)All of these are possible, depending on the size of the bond offering.

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Definitions:

Favourable Variances

Differences between actual and budgeted performance that result in better than expected financial outcomes.

Raw Material

The basic materials from which products are manufactured or made.

Desired Outcome

The specific result or objective that an individual or organization aims to achieve through a set of actions or strategies.

Participate

To take part or become involved in an activity or event.