Which of the following statements is true?

A. Treasury bonds have zero default risk.
B. The longer the maturity of a bond, the less risky it is.
C. The real risk-free rate incorporates an inflation premium.
D. Liquidity premium is included only for highly liquid securities.
E. The default risk is greater for AAA-rated corporate bonds than for BBB-rated bonds with the same features.


Answer: A

Business

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