Which of these is a disadvantage of municipal bonds?

a.

At least one study found a correlation between inflation and municipal bond default rates.

b.

They have longer terms to maturity.

c.

They are less liquid than US Treasury bonds.

d.

As the economy slows, the level of defaults in municipal bonds increases.

Which of these statements best describes the flight to quality that began in the autumn of 2008?

a.

Money quickly flowed out of low-graded and speculative corporate bonds and into the T-bill market.

b.

Money slowly moved out of low-graded and speculative corporate bonds and into the T-bill market.

c.

Money slowly moved out from even medium-rated corporate bonds and into the T-bill market.

d.

Money quickly flowed out of even medium-rated corporate bonds and into the T-bill market.