The yield on a small, regional corporate bond is generally higher than the yield on a large, national corporate bond mainly due to:
A) differences in coupon rates.
B) differences in quality.
C) differences in tax treatments.
D) differences in marketability.

Question

Quizplus · Accepted Answer

Smaller, regional corporate bonds typically have lower marketability compared to larger, national corporate bonds, leading to higher yields to compensate investors for the increased liquidity risk.

The Yield on a Small, Regional Corporate Bond Is Generally