Use the Information for the Question(s) Below

question 60

Multiple Choice

Use the information for the question(s) below.
-Why are the interest rates of U.S. Treasury securities less than the interest rates of equivalent corporate bonds?

• A) The U.S. government has a high credit spread.
• B) There is significant risk that the U.S. government will default.
• C) U.S. Treasury securities are widely regarded to be risk-free.
• D) U.S. Treasury securities yield inflation adjusted interest rates.

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Definitions:

Total Cost Functions

Mathematical representations that describe how the total cost of production changes as the output level varies.

Market Price

The existing rate at which an asset or service can be acquired or disposed of in a trading environment.

Technology

The application of scientific knowledge for practical purposes, especially in industry, which drives innovation, efficiency, and the development of new products and processes.

Total Costs

The total of all costs associated with producing goods or services, encompassing both fixed and variable expenses.