We would expect the interest rate on Bond A to be higher than the interest rate on Bond B if the two bonds have identical characteristics except that
A) the credit risk associated with Bond A is lower than the credit risk associated with Bond B.
B) Bond A was issued by the state of New York and Bond B was issued by the Exxon Mobil Corporation.
C) Bond A has a term of 20 years and Bond B has a term of 2 years.
D) All of the above are correct.
Correct Answer:
Verified
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