Three factors explain the risk structure of interest rates
A)liquidity,default risk,and the income tax treatment of a security.
B)maturity,default risk,and the income tax treatment of a security.
C)maturity,liquidity,and the income tax treatment of a security.
D)maturity,default risk,and the liquidity of a security.

Question

Quizplus · Accepted Answer

The risk structure of interest rates is explained by liquidity, default risk, and the income tax treatment of a security. These factors influence the interest rates on different securities with the same maturity.

Three Factors Explain the Risk Structure of Interest Rates