Which of the Following Long-Term Bonds Should Have the Lowest

question 78

Multiple Choice

Which of the following long-term bonds should have the lowest interest rate?

• A) Corporate Baa bonds
• B) U.S. Treasury bonds
• C) Corporate Aaa bonds
• D) Municipal bonds

---

Definitions:

Coase Theorem

A principle in economics that suggests that if property rights are well-defined and trade is possible without cost, parties can negotiate to resolve externalities or conflicts over resource allocation efficiently themselves.

Optimal Allocation

The most efficient distribution of resources and efforts among various possible tasks or uses to maximize desired outcomes or objectives.

Social Good

refers to an action or a policy that benefits society at large, often with an emphasis on public resources and welfare.

Marginal Benefit (MB) Curve

A graphical representation that shows the additional satisfaction or utility a consumer receives from consuming one more unit of a good or service.