Default risk arises from the fact that
A) borrowers differ in their ability to repay in full the principal and interest required by a bond agreement.
B) the bond price drops when interest rates rise.
C) it is inherently riskier to wait for a capital gain than to receive an immediate interest payment.
D) interest rates are far more likely to go up than to go down.
Correct Answer:
Verified
Q3: Which of the following is the highest
Q4: The risk premium of corporate bonds typically
Q5: Bond ratings
A)are published annually by the federal
Q7: Which of the following is the lowest
Q7: U.S. Treasury securities
A)are considered risk free because
Q9: Default risk
A) is the probability that a
Q10: The default risk premium is measured
A) by
Q11: Currently,a three-month Treasury bill has a yield
Q17: Investors often pay professional analysts to gather
Q29: The default risk premium fluctuates mainly
A)because bond
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