Investors would expect a higher yield on a smaller,regional corporate bond than on a large,national corporate bond mainly due to:
A)differences in coupon rates.
B)differences in quality.
C)differences in tax treatments.
D)differences in marketability.

Question

Quizplus · Accepted Answer

Investors expect a higher yield on smaller, regional corporate bonds due to differences in marketability. Smaller bonds are typically less liquid and harder to sell, so investors demand a higher yield to compensate for this increased risk.

Investors Would Expect a Higher Yield on a Smaller,regional Corporate