Because bonds are more standardized than loans, transactions costs for bonds are typically lower than transactions costs for loans.

Question

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Bonds are typically traded in large denominations and have standardized features such as maturity date, interest rate, and payment frequency. These standard features make bond transactions more efficient and less costly than negotiating individual loan contracts, which have fewer standard features and may require more negotiation and customization.

Because Bonds Are More Standardized Than Loans, Transactions Costs for Bonds