Multiple Choice
Figure 14.1: BAA and 10-Year Bonds, 2006-2010 
-Consider Figure 14.1. The difference between these two curves can be interpreted as:
A) the financial friction.
B) inflation expectations.
C) the risk-free rate.
D) a market imperfection.
E) the prime lending rate.
Correct Answer:
Verified
Correct Answer:
Verified
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