This is the risk of not being repaid either interest or principal. Treasury securities are generally, although not perfectly, considered to be default free. All other securities are judged relative to this standard. Few high rated firms default. Liquidity Liquidity is the ability to turn an investment into cash quickly and without a loss.
Investors prefer liquid securities and thus are willing to pay more for liquid securities.
The longer the duration, the more interest rate risk the security has. Thus, if a security has different tax status of other securities, it will have different yields. It is widely reported in the financial press and is one of the key ways that bond traders gauge the market. The yield curve is determined by future interest rates. From this we can find the expected future 1 year rate that will be in place from year 1 to year 2.