Multiple Choice
Relative to long-term corporate bonds, long-term government bonds (T-bonds) report a higher standard deviation and a lower return. What best explains this observation?
A) The observation reflects a market inefficiency.
B) T-bonds are less liquid than corporate bonds.
C) T-bonds are more commonly callable than corporate bonds.
D) T-bonds pay interest that is exempt from state and local income taxes.
Correct Answer:
Verified
Correct Answer:
Verified
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