Lola now looks at a Bloomberg screen that provides information about the characteristics of a number of corporate bonds:
IBM note, issued date 1/05/17, repayment date 1/05/19, price $100, yield 2.5% SnorX note, issued date 1/05/17, repayment date 1/05/19, price $100, yield 5.5%
Explain why SnorX must pay a higher rate than IBM, to borrow for 2 years and why both SnorX and IBM pay more than the government to borrow money over the same period.