You would expect a bond of an Eastern European government to pay (options: the same, a...

You would expect a bond of an Eastern European government to pay (options: the same, a higher, a lower) interest rate as compared to a bond of the U.S. government.

You would expect a bond that repays the principal in year 2040 to pay (options: the same, a higher, a lower) interest rate as compared to a bond that repays the principal in year 2020.

You would expect a bond from a software company you run in your garage and a bond from Coca-Cola to pay different interest rates because of differences in the bonds' (options: terms of maturity, tax treatments, credit risks)

You would expect a bond issued by the federal government and a bond issued by New York State to pay different interest rate because of differences in the bonds' (options: terms of maturity, tax treatments, credit risks)

Expert Solution

a) You would expect a bond of an Eastern European government to pay a higher, interest rate as compared to a bond of the U.S. government.

b) You would expect a bond that repays the principal in year 2040 to pay a higher interest rate as compared to a bond that repays the principal in year 2020.

c)You would expect a bond from a software company you run in your garage and a bond from Coca-Cola to pay different interest rates because of differences in the bonds' credit risks.

d) You would expect a bond issued by the federal government and a bond issued by New York State to pay different interest rate because of differences in the bonds' credit risks.

Rahul Sunny answered 2 years ago

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