Everything Else Held Constant,the Interest Rate on Municipal Bonds Rises

question 78

Multiple Choice

Everything else held constant,the interest rate on municipal bonds rises relative to the interest rate on Treasury securities when

• A)income tax rates are lowered.
• B)income tax rates are raised.
• C)municipal bonds become more widely traded.
• D)corporate bonds become riskier.

---

Definitions:

Adjusting Entries

Entries recorded in accounting logs at the end of a fiscal period for the purpose of allocating earnings and costs to their rightful period.

Note Payable

A written promissory note in which the borrower agrees to pay back a specified sum to the lender at a future date, with interest.

Unearned Fees

Income received by a business for services that have yet to be performed or delivered, considered a liability until the service is completed.

Unearned Revenue

Money received by a company for goods or services that have yet to be provided to the customer.