Question: The following table contains selected interest rate data from FRED for January of 2016. Real-time data provided by Federal Reserve Economic Data (FRED), Federal Reserve
The following table contains selected interest rate data from FRED for January of 2016. Real-time data provided by Federal Reserve Economic Data (FRED), Federal Reserve Bank of Saint Louis. Do the magnitudes of these interest rates conform to what economic theory would predict? (Check all that apply) Yes, Since Baa-rated corporate bonds have the highest default risk, they also have the highest interest rate. No, Since Aaa-rated corporate bonds are the highest quality bonds, they should also have the highest interest rate. Yes, Corporate bonds always have higher interest rates than U.S. Treasury bonds because they always have some risk of default, whereas U.S. Treasury bonds have little to no risk of default. No, Since 3-month T-bills are the most secure investment, they should have the highest interest rate
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