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Identify which of the two financial assets in each group would usually pay a lower nominal interest rate, and explain why: (a) U.S. Treasury bill
Identify which of the two financial assets in each group would usually pay a lower nominal interest rate, and explain why: (a) U.S. Treasury bill vs. U.S. Treasury bond; (b) money market deposit account vs. commercial paper; (c) municipal bond vs. corporate bond; (d) fixed-rate loan vs. flexible rate loan, issued when the nominal prime lending rate is high; (e) low vs. high default risk bank loan.
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