Other factors being equal,____ bonds will offer the highest yields.

Question

Quizplus · Accepted Answer

Treasury bonds are considered the safest investment and therefore offer the lowest yields. As the credit rating of a bond decreases, the yield increases. Therefore, AAA-rated corporate bonds will offer a higher yield than BBB-rated Treasury bonds, AA-rated corporate bonds will offer a higher yield than AAA-rated corporate bonds, and A-rated corporate bonds will offer the highest yield.

Other Factors Being Equal,____ Bonds Will Offer the Highest Yields