Which of the following long-term bonds has the lowest interest rate?
A)corporate Baa bonds
B)U.S. Treasury bonds
C)corporate Aaa bonds
D)municipal bonds

Question

Quizplus · Accepted Answer

U.S. Treasury bonds are considered the safest investment as the government backs them, making them low-risk investments. Due to this low risk, the interest rates on U.S. Treasury bonds tend to be lower than other long-term bonds such as corporate bonds or municipal bonds. Meanwhile, corporate Aaa bonds and Baa bonds tend to have higher interest rates than U.S. Treasury bonds because of their higher risk. Municipal bonds may have lower interest rates than U.S. Treasury bonds, but this is dependent on the credit rating of the issuing municipality.

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