For each of the following pairs, which bond would you expect to pay a higher interest rate?
Question:
For each of the following pairs, which bond would you expect to pay a higher interest rate? Explain.
a. A bond of the U.S. government or a bond of an Eastern European government
b. A bond that repays the principal in year 2020 or a bond that repays the principal in year 2040
c. A bond from Coca-Cola or a bond from a software company you run in your garage
d. A bond issued by the federal government or a bond issued by New York State
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a The bond of an eastern European government would pay a higher interest r...View the full answer
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