Which Two of the Following Factors Cause the Yields on a Corporate

question 74

Multiple Choice

Which two of the following factors cause the yields on a corporate bond to differ from those on a comparable Treasury security?
I.inflation risk
II.interest rate risk
III.taxability
IV.default risk

• A)I and II only
• B)III and IV only
• C)I, II, and IV only
• D)II, III, and IV only
• E)I, II, III, and IV

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Definitions:

Availability Heuristic

A cognitive shortcut based on the first examples that spring to mind when considering a particular topic, idea, strategy, or choice.

Estimated Probability

A statistical measure expressing the likelihood of a specific event occurring based on current evidence or past occurrences.

Instances

Specific examples or occurrences of a particular event, situation, or phenomenon.

Subjective Utility

An individual's perceived value or satisfaction obtained from consuming goods or services.