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Go through the Wall Street Journal or Yahoo Finance to see the different interest rates for different bonds. For each of the following situations,
Go through the Wall Street Journal or Yahoo Finance to see the different interest rates for different bonds. For each of the following situations, which Bond would you expect to have a higher interest rate? Explain your reasoning. 1. A US Government Bond or a Bond issued by the Ford Motor Company, given that the market for US Govt Bonds is more liquid. 2. A US Govt Bond or a Bond issued by IBM Corp, given that state and local Govt cannot tax the interest earned on US Govt Bonds. 3. A bond issued by Microsoft Corporation or by Micro-smart given that micro-smart is near bankruptcy.
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