Potential Buyers of ABC Corporation Bonds Are Concerned About ABC

Multiple Choice

Potential buyers of ABC Corporation bonds are concerned about ABC Corporation declaring bankruptcy.Potential buyers of XYZ Corporation bonds are not concerned that XYZ Corporation may declare bankruptcy.Which of the following statements is correct?

A) Other things equal,the interest rate on XYZ Corporation bonds will be high relative to the interest rate on ABC Corporation bonds.
B) An ABC Corporation bond must have a longer term than an XYZ Corporation.
C) XYZ Corporation bonds carry less default risk than do ABC Corporation bonds.
D) All of the above are correct.