Multiple Choice
The following yields on 20 year bonds prevailed in January for the three securities shown:
Aa-rated corporate bond 9.98%
Baa-rated corporate bond 10.34%
B-rated corporate bond 11.12%
The difference in yields is due primarily to
A) maturity risk premium
B) default risk premium
C) seniority risk premium
D) financial risk premium
Correct Answer:
Verified
Correct Answer:
Verified
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