In examining the term structure of interest rates, the interest rates of ____ have exceeded short-term rates.
A) commercial paper
B) notes payable
C) corporate bonds
D) marketable securities

Question

Quizplus · Accepted Answer

Corporate bonds are a long-term debt instrument issued by corporations. Generally, these bonds pay a higher interest rate when compared to short-term rates due to the longer time period for repayment and higher risk associated with the issuing corporation. Therefore, the interest rates on corporate bonds have exceeded short-term rates in examining the term structure of interest rates.

In Examining the Term Structure of Interest Rates, the Interest