For each of the following pairs, which bond would you expect to pay a higher interest rate? Explain! a).  a bond of the U.S. government or a bond of an East European government b).  a bond that repays the principal in year 2015 or a bond that repays the principal in year 2040 c).  a bond from Coca-Cola or a bond from a software company you run in your garage

Question

For each of the following pairs, which bond would you expect to pay a higher interest rate? Explain!

a).  a bond of the U.S. government or a bond of an East European government

b).  a bond that repays the principal in year 2015 or a bond that repays the principal in year 2040

c).  a bond from Coca-Cola or a bond from a software company you run in your garage

d).  a bond issued by the federal government or a bond issued by New York State

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