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interest rates on 30-year Treasury and corporate bonds with different ratings, all of which are non-callable, are as follows: State your reason for the answer. T-bond = 7.72%           A = 9.64% AAA = 8.72%           BBB = 10.18%  The differences in rates among these issues were most probably caused primarily by: Real risk-free rate differences. Tax effects. Maturity risk differences. Inflation differences. Default and liquidity risk

interest rates on 30-year Treasury and corporate bonds with different ratings, all of which are non-callable, are as follows: State your reason for the answer. T-bond = 7.72%           A = 9.64% AAA = 8.72%           BBB = 10.18%  The differences in rates among these issues were most probably caused primarily by: Real risk-free rate differences. Tax effects. Maturity risk differences. Inflation differences. Default and liquidity risk

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Assume that interest rates on 30-year Treasury and corporate bonds with different ratings, all of which are non-callable, are as follows: State your reason for the answer.

T-bond = 7.72%           A = 9.64%

AAA = 8.72%           BBB = 10.18% 

The differences in rates among these issues were most probably caused primarily by:

  1. Real risk-free rate differences.
  2. Tax effects.
  3. Maturity risk differences.
  4. Inflation differences.
  5. Default and liquidity risk differences.
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