Which of the following long-term bonds has the highest interest rate?
A) Corporate Baa bonds
B) U.S. Treasury bonds
C) Corporate Aaa bonds
D) Municipal bonds

Question

Quizplus · Accepted Answer

Corporate bonds usually offer a higher interest rate than government-issued bonds to compensate for the additional risk taken by investors. Baa rated bonds are considered to be a lower rating, indicating a higher credit risk, which is why they offer a higher interest rate compared to Treasury and Aaa corporate bonds. Municipal bonds are issued by local governments and may have lower interest rates as they are considered to have a lower risk.

Which of the Following Long-Term Bonds Has the Highest Interest