Predict what will happen to interest rates on a corporations bonds if the federal government guarantees today that it will pay creditors if the corporation goes bankrupt in the future What will happen to the interest rates on Treasury securities ...

The government guarantee will reduce the default risk on co ...

Predict what will happen to interest rates on a corporations bonds if the federal government guarantees today

Question:

Predict what will happen to interest rates on a corporation’s bonds if the federal government guarantees today that it will pay creditors if the goes bankrupt in the future. What will happen to the interest rates on Treasury securities?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...