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

question 14

Multiple Choice

Assume that interest rates on 20-year Treasury and corporate bonds are as follows:
$\text { T-bond } = 7.72 \% \quad \text { AAA } = 8.72 \% \quad \text { A } = 9.64 \% \quad \text { BBB } = 10.18 \%$
The differences in these rates were probably caused primarily by:

• A) Tax effects.
• B) Default and liquidity risk differences.
• C) Maturity risk differences.
• D) Inflation differences.
• E) Real risk-free rate differences.

---

Definitions:

Inventory Control

The systematic approach to ordering, storing, and using a company's inventory, ensuring adequate supply without excessive oversupply.

Quick Response System

A management approach designed to increase the efficiency of inventory management by reducing lead times and thus responding faster to market demand.

Fashion Industry

A global sector dedicated to the business of creating, manufacturing, and distributing clothing, footwear, and accessories.

Logistical Overlay

Applying additional layers of planning and implementation to ensure efficient and effective transportation, warehousing, and delivery of goods.