Two Bonds Have the Same Term to Maturity

question 5

Multiple Choice

Two bonds have the same term to maturity.The first was issued by a government and the probability of default is believed to be low.The other was issued by a corporation and the probability of default is believed to be high.Which of the following is correct?

• A)Because they have the same term to maturity the interest rates should be the same.
• B)Because of the differences in tax treatment and credit risk,the state bond should have the higher interest rate.
• C)Because of the differences in tax treatment and credit risk,the corporate bond should have the higher interest rate.
• D)It is not possible to say if one bond has a higher interest rate than the other.

Understand and apply the basic concepts of the metric system.

Accurately perform conversions within the metric system (e.g., cm to m, m to km).

Recognize and correctly use the standard abbreviations for metric units.

Estimate and verify conversions between metric and non-metric (imperial) units.

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Definitions:

Mutual Ground

A shared understanding or common interests that enable parties in a discussion or negotiation to find agreement.

Cultures

The characteristics and knowledge of a particular group of people, encompassing language, religion, cuisine, social habits, music, and arts.

Assistive Technologies

Devices, software, or equipment that help people with disabilities perform tasks that might otherwise be difficult or impossible.

Career Paths

The progression or sequence of jobs and roles that a person undertakes throughout their working life.