Why Are the Interest Rates of Treasury Bonds Less Than

question 25

Multiple Choice

Why are the interest rates of Treasury bonds less than the interest rates of equivalent corporate bonds?

• A)Treasury bonds are widely regarded to be risk-free.
• B)Treasury bonds are generally used to determine interest rates.
• C)The Australian government has a high credit spread.
• D)There is significant risk that the Australian government will default.

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Definitions:

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