In equilibrium,interest rates on different assets will differ for all of the following reasons,except for differences in _____.

Question

Quizplus · Accepted Answer

In equilibrium, asset prices should be such that there are no arbitrage opportunities, meaning that the expected return on all assets should be equal given their associated risks, duration and tax treatment. Therefore, differences in asset prices should not affect interest rates on different assets.

In Equilibrium,interest Rates on Different Assets Will Differ for All