Assume That Interest Rates on 20-Year Treasury and Corporate Bonds $\begin{array}{llcc} \text { T-bond =7.72 \% } & \text { A=9.64 \% } \\ \text { AAA=8.72 \% } &\text { BBB=10.18 \% } \end{array}$

question 148

Multiple Choice

Assume that interest rates on 20-year Treasury and corporate bonds with different ratings,all of which are noncallable,are as follows:What most probably caused the differences in rates among these issues?
$\begin{array}{llcc} \text { T-bond =7.72 \% } & \text { A=9.64 \% } \\ \text { AAA=8.72 \% } &\text { BBB=10.18 \% } \end{array}$

• A)real risk-free rate differences
• B)default risk differences
• C)maturity risk differences
• D)inflation differences

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