We would expect the interest rate on Bond A to be lower than the interest rate on Bond B if the two bonds have identical characteristics except that
a.
the credit risk associated with Bond A is higher than the credit risk associated with Bond B.
b.
Bond A was issued by the state of New York and Bond B was issued by the Exxon Mobil Corporation.
c.
Bond A has a term of 20 years and Bond B has a term of 2 years.
d.
All of the above are correct.
