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assume that interest rates on 20-year treasury and corporate bonds with different ratings, all of which are noncallable, are as follows

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khuranashilpa76

Assume that interest rates on 20-year treasury and corporate bonds with different ratings, all of which are noncallable, are as follows default risk differences.

The more credit danger related to an enterprise the better the fee of going back presented on its monetary contraptions, and that is reflected in the example given within the query. The T bond has the lowest chance of default due to the fact it's far assured by using the Treasury, so the return is the lowest.

The excellent-rated company bond has the bottom return among company bonds, and the worst-rated pays the best return bonds can be noncallable for a time period, giving a length of constant hobby payments to the customer after which, become callable after that period to allow the company to reset the interest fee at the debt specifically if the marketplace has changed. Noncallable security is a monetary safety that can't be redeemed early by the company besides from the fee of a penalty.

Learn more about The interest rate here:-https://brainly.com/question/3405605

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