Assume the bonds below have the same term and principal and that the state or local government that issues the municipal bond has a good credit rating.Which list has bonds correctly ordered from the one that pays the highest interest rate to the one that pays the lowest interest rate?
A)corporate bond,municipal bond,U.S.government bond
B)corporate bond,U.S.government bond,municipal bond
C)municipal bond,U.S.government bond,corporate bond
D)U.S.government bond,municipal bond,corporate bond

Question

Quizplus · Accepted Answer

Corporate bonds typically pay the highest interest rates due to higher risk, followed by U.S. government bonds, and municipal bonds usually pay the lowest due to tax advantages.

Assume the Bonds Below Have the Same Term and Principal