Investors require a higher rate of return on bonds with higher bond ratings.

Name: Investors require a higher rate of return on bonds with higher bond ratings.
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Investors require a higher rate of return on bonds with lower bond ratings. This is because lower-rated bonds are considered to be riskier investments and therefore require a higher return to compensate for the greater risk. Higher-rated bonds, on the other hand, are considered to be safer investments and therefore offer lower returns.

Investors Require a Higher Rate of Return on Bonds with Higher