Corporate bond yields are higher than similar maturity government bond yields due to:
A)greater risk on the part of corporate bonds.
B)higher overall tax rates on corporate bonds than on government bonds.
C)a "thinner" secondary market for corporate bonds than government bonds.
D)All of the above.

Question

Quizplus · Accepted Answer

Corporate bond yields are typically higher than government bond yields due to greater risk (credit risk), potentially higher taxes, and a less liquid (thinner) secondary market. These factors increase the yield required by investors to compensate for the additional risks and limitations associated with corporate bonds compared to government bonds.

Corporate Bond Yields Are Higher Than Similar Maturity Government Bond