In a Recent Year, Interest Rates on Long-Term Government and Corporate

question 65

Multiple Choice

In a recent year, interest rates on long-term government and corporate bonds were as follows: The differences in rates among these issues were caused primarily by

• A) Tax effects.
• B) Default risk differences.
• C) Maturity risk differences.
• D) Inflation differences.
• E) Answers b and d are both correct.

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Definitions:

Desired Ends

Specific goals or outcomes that individuals or organizations aim to achieve through their actions and strategies.

Utilitarian View

An ethical philosophy that posits the best action is the one that maximizes utility, typically defined as that which produces the greatest well-being of the greatest number of people.

Greatest Good

A principle often associated with utilitarianism, focusing on actions that aim to maximize happiness or benefit for the greatest number of people.

Terminal Values

Deeply held beliefs or goals that individuals consider as their ultimate life objectives.