Which two of the following factors cause the yields on a corporate bond to differ from those on a comparable Treasury security?
I.inflation risk
II.interest rate risk
III.taxability
IV.default risk

Question

Quizplus · Accepted Answer

III and IV onlyCorporate bonds typically offer higher yields than comparable Treasury securities due to their taxability and the default risk associated with the issuing corporation. Inflation risk and interest rate risk affect both types of bonds similarly.

Which Two of the Following Factors Cause the Yields on a Corporate