Which of the Following Is True Concerning Interest Rates on Bonds

question 13

Multiple Choice

Which of the following is true concerning interest rates on bonds?

• A)The tax treatment of interest earned on municipals bonds makes the interest rate on them higher than otherwise.High default risk makes the interest rate on a bond higher than otherwise.
• B)The tax treatment of interest earned on municipals bonds makes the interest rate on them higher than otherwise.High default risk makes the interest rate on a bond lower than otherwise.
• C)The tax treatment of interest earned on municipals bonds makes the interest rate on them lower than otherwise.High default risk makes the interest rate on a bond higher than otherwise.
• D)The tax treatment of interest earned on municipals bonds makes the interest rate on them lower than otherwise.High default risk makes the interest rate on a bond lower than otherwise.

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Definitions:

Duty Of Loyalty

An obligation of fiduciaries to act in the best interest of the party they owe the duty to, often in contexts such as corporate governance.

Real Estate Investment

The act of allocating financial resources into real estate properties with the expectation of generating income through rental yields or capital gains.

Authorization

Official permission or power granted to an individual or entity to carry out certain actions.

Liability

Refers to the state of being legally responsible for something, particularly in terms of debts or financial obligations.