A number of factors give rise to different interest rates or yields being observed for different types

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A number of factors give rise to different interest rates or yields being observed for different types of debt instruments. What are these factors?

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Differences in maturity default risk marketability taxability and option features affect yields on financial instruments In general the longer the maturity the greater the default risk the lower the marketability and the more the return is subject to ordinary income taxation as opposed to capital gains taxation or no taxation the higher the yield on the instrument If the investor receives an option eg a conversion feature ...View the full answer

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