Everything else being the same, a junk bond will offer a ______ interest rate than a (same maturity) AAA bond, and a _____ interest rate than a (same maturity) U.S. Treasury bond.

Question 18 options:

	lower; higher
	higher; lower
	lower; lower
	higher; higher

Rumors about a huge budget deficit and the impossibility of the government being able to raise taxes will _______ the country's sovereign debt's risk of default, making it _____ to issue (i.e., sell) government bonds.

Question 19 options:

	increase; easier
	decrease; easier
	increase; more difficult
	decrease; more difficult

The high-yield spread is the difference between interest rates on ________ corporate bonds with 10-year maturities and reflects the _________.

Question 20 options:

	A and AAA; state of the economy
	C and AAA; risk premium
	C and AAA; inflation rate
	BBB and AAA; risk premium