Asked by dreya flores on May 03, 2024
Verified
Bond A and Bond B are identical except Bond B has a longer term. Therefore, we expect Bond _____ to pay a higher rate of interest.
Term
In finance, it refers to the length of time until a loan's maturity. In general, it can mean a period or condition stipulated in an agreement.
Higher Rate
A term that generally indicates a rate (of interest, tax, etc.) that is above the normal or average level.
- Familiarize oneself with the idea of credit risk and the way it determines the interest rates on bonds.
Verified Answer
MB
Learning Objectives
- Familiarize oneself with the idea of credit risk and the way it determines the interest rates on bonds.