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18. Assume that interest rates on 20-year Treasury and corporate bonds are as follows: T-bond = 7.72% AAA = 8.72% A = 9.64% BBB= 10.18%
18. Assume that interest rates on 20-year Treasury and corporate bonds are as follows:
T-bond = 7.72%
AAA = 8.72%
A = 9.64%
BBB= 10.18%
The differences in tese rates were probably caused primarily by:
a. Tax effects.
b. Default risk differences.
c. Maturity risk differences.
d. Inflation differences.
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