Which of the following statements is true?
A) Interest rates always rise before recessions.
B) Default risk premiums vary inversely with economic activity.
C) Municipal bond yields are usually higher than similar risk corporate yields.
D) Treasury bond yields are always higher than Treasury bill yields.

Question

Quizplus · Accepted Answer

Default risk premiums tend to increase during economic downturns as the risk of default rises, and decrease during periods of economic growth.

Which of the Following Statements Is True