Assume that interest rates on 20-year Treasury and corporate bonds are as follows:  T-bond = 7.72%         AAA = 8.72%         A = 9.64%         BBB = 10.18%The differences in these rates were probably caused primarily by:

A. Tax effects.
B. Default and liquidity risk differences.
C. Maturity risk differences.
D. Inflation differences.
E. Real risk-free rate differences.


Answer: B

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