Would homeowners tend to favor high or low interest rates

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Reference no: EM131832935

1. In each of the three cases, which bond will usually pay a higher interest rate?

a. A bond rated AAA, or a bond rated BBB?

b. A U.S. government bond, or a General Motors bond?

c. A Citibank bond that gets repaid in 30 years or a Citibank bond that gets repaid in 1 year?

2. How are houses like bonds? With respect only to their home equity (i.e., ignoring all other assets and investments), would homeowners tend to favor high or low interest rates?

Reference no: EM131832935

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