Other things the same,bonds are likely to have higher interest rates if they have
A)tax exemptions and short terms.
B)tax exemptions and long terms.
C)no tax exemptions and short terms.
D)no tax exemptions and long terms.

Question

Quizplus · Accepted Answer

Bonds with longer terms are more exposed to interest rate risk, and typically have higher interest rates to compensate investors for this risk. Additionally, if there are no tax exemptions, investors will require a higher yield to compensate for the taxes they will have to pay on their investment income.

Other Things the Same,bonds Are Likely to Have Higher Interest