Nongovernmental issues typically have slightly higher yields than government issues with similar maturities because ________.
A) they experience little or no loss in value over time
B) of the slightly higher risk associated with them
C) the yields are guaranteed by the federal government
D) of having stronger secondary market

Question

Quizplus · Accepted Answer

Nongovernmental issues, such as corporate bonds, are typically considered slightly riskier than government issues. Therefore, investors demand a slightly higher yield as compensation for taking on that additional risk.

Nongovernmental Issues Typically Have Slightly Higher Yields Than Government Issues