If asset A is a 30-year U.S. Treasury bond yielding 9 percent and asset B is a 30-year corporate bond issued by General Motors that also yields 9 percent, risk averse investors would
A) prefer asset A.
B) prefer asset B.
C) be indifferent between the two assets.
D) differ according to their rate of time preference.
A
You might also like to view...
Explain why specialization and trade increases a country's overall level of consumption
What will be an ideal response?
The state government requires all persons to pay 5% of their incomes in income tax.This is an example of:
a. The benefits principle b. a proportional tax c. a regressive tax d. a progressive tax
The elasticity that measures the responsiveness of consumer demand to changes in income is the:
A. neither the income elasticity, the own price elasticity, nor the cross-price elasticity. B. own price elasticity. C. cross-price elasticity. D. income elasticity.
The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B B. recessionary; C C. recessionary; A D. expansionary; A