Which of the following long-term bonds normally has the highest interest rate?
a. Corporate Baa bonds
b. U.S. Treasury bonds
c. Corporate Aaa bonds
d. Municipal bonds

Respuesta :

The corporate Baa bonds (A) have the highest interest rate because it have the highest level of risk. Corporate bonds have lower the rating and it can impact on risk they hold and also Baa have a lower rating than Aaa.

A bond or also known as corporate bonds can be defined as a debt obligation. There are several rating for corporate bonds, such as Aaa, and Baa. The range for corporate bond is from a high of Aaa to a low of C. The rating Baa is highly protected nor poorly secured and they are considered as medium-grade obligations.

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