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Interest rates for corporate bonds and Treasury securities

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Predict what will happen to interest rates on a corporation's bonds 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?

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The solution determines the interest rates for corporate bonds and treasury securities.

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Rates on corporate bonds will go down because their bonds are going to be less risky, since if something happened to ...

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