Business

17 March, 05:19

We would expect the interest rate on Bond A to be lower than the interest rate on Bond B if the two bonds have identical characteristics except that

a.

the credit risk associated with Bond A is higher than the credit risk associated with Bond B.

b.

Bond A was issued by the state of New York and Bond B was issued by the Exxon Mobil Corporation.

c.

Bond A has a term of 20 years and Bond B has a term of 2 years.

d.

All of the above are correct.

+1

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