Predict what will happen to interest rates on a corporations bond 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 default rate risk of the corporate bond would be reduced by th ...

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

Question:

Predict what will happen to interest rates on a corporations bond 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...