Other things being equal, the yield required on A-rated bonds should be ____ the yield required on B-rated bonds whose other characteristics are exactly the same.
A)greater than
B)equal to
C)less than
D)All of these are possible, depending on the size of the bond offering.

Question

Quizplus · Accepted Answer

A-rated bonds are considered to be of higher credit quality than B-rated bonds, meaning they are seen as less risky. Investors typically require a lower yield on investments they perceive to be less risky.

Other Things Being Equal, the Yield Required on A-Rated Bonds