Assuming That the Bonds Below Have the Same Term and Principal

question 127

Multiple Choice

Assuming that the bonds below have the same term and principal and that the state or local government which issues the municipal bond has a good credit rating,which list has bonds ordered from the one that pays the most interest to the one that pays the least interest?

• A)corporate bond, municipal bond, U.S.government bond
• B)corporate bond, U.S.government bond, municipal bond
• C)municipal bond, U.S.government bond, corporate bond
• D)U.S.government bond, municipal bond, corporate bond

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Definitions:

Festinger

An American social psychologist best known for Cognitive Dissonance Theory, which explains the discomfort that arises from holding two conflicting beliefs simultaneously.

Cognitive Dissonance

The psychological discomfort experienced when holding two or more conflicting beliefs, values, or attitudes, leading to changes in belief or behavior to reduce the discomfort.

Elliot Aronson

An influential psychologist known for his research on social influence, group dynamics, and the theory of cognitive dissonance.

Theory of Planned Behavior

A psychological theory that links one's beliefs and attitudes towards behaviors to their actual behavioral intentions and actions.