Two of the Primary Differences Between a Corporate Bond and a Treasury

question 36

Multiple Choice

Two of the primary differences between a corporate bond and a Treasury bond with identical maturity dates are related to

• A)interest rate risk and time value of money.
• B)time value of money and inflation.
• C)taxes and potential default.
• D)taxes and inflation.
• E)inflation and interest rate risk.

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Definitions:

Fixed Cost

Fixed cost is a business expense that remains constant regardless of changes in the level of production or sales volumes, such as rent or salaries.

Lawn-mowing

The act of cutting the grass of a lawn to maintain a specified height and neat appearance.

Variable Costs

Expenses that change in proportion to the activity or volume of goods or services produced.

Snow-clearing

Snow-clearing involves the removal of snow from roads, sidewalks, and other public areas to ensure safety and accessibility during winter conditions.