Atlas Corporation is in sound financial condition. It sells a long-term bond. Which of the following make the interest rate on this bond lower than otherwise?
A)Both Altas' sound finances and the long term of the bond.
B)Atlas' sound finances but not the long term of the bond.
C)The long term of the bond but not Atlas' sound finances.
D)Neither Atlas' sound finances nor the long term of the bond.

Question

Quizplus · Accepted Answer

Atlas Corporation's sound financial condition would make the interest rate on its bond lower because investors perceive it as a lower risk. However, the long term of the bond typically increases the interest rate due to higher risk over a longer period.

Atlas Corporation Is in Sound Financial Condition