Question: Why, empirically, does a AAA-rated bond carry a lower yield compared to a B-rated bond? A. An AAA-rated bond carries less risk. B. At equal

Why, empirically, does a AAA-rated bond carry a lower yield compared to a B-rated bond?

A. An AAA-rated bond carries less risk.

B. At equal yields, an AAA-rated bond is less attractive to investors.

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