Asked by Ismael Santiago on May 09, 2024
Verified
Bonds issued by state and local governments are called _____ bonds. Bonds issued by financially shaky corporations are called _____ bonds. Of these two, which type of bond usually pays a relatively higher interest rate?
State And Local Governments
The subdivisions of the federal government with their own specific powers and responsibilities, managing local affairs and providing public services.
Higher Interest Rate
An increased cost of borrowing money reflected in the percentage charged on the principal amount by lenders to borrowers.
Financially Shaky Corporations
Companies that are experiencing financial instability or distress, potentially leading to increased risk for investors and creditors.
- Acquire knowledge about the notion of credit risk and its influence on bond yields.
- Detail the framework, functionality, and classifications of financial instruments and mediators.
Verified Answer
DL
Learning Objectives
- Acquire knowledge about the notion of credit risk and its influence on bond yields.
- Detail the framework, functionality, and classifications of financial instruments and mediators.