If the following securities are of equal maturity, which will have the lowest yield at a given point in time?
A) A consumer loan
B) A municipal bond rated Aaa
C) An Aaa-rated corporate bond
D) A Baa-rated corporate bond

Question

Quizplus · Accepted Answer

Municipal bonds typically have lower yields than corporate bonds because they have tax advantages, and Aaa-rated bonds have lower yields than lower-rated bonds because they are considered less risky. Consumer loans are not typically traded as securities, so they don't have a yield in the traditional sense.

If the Following Securities Are of Equal Maturity, Which Will