If the possibility of a default increases because corporations begin to suffer losses,then the default risk on corporate bonds will ________,and the bonds' returns will become ________ uncertain,meaning that the expected return on these bonds will decrease,everything else held constant.
A)increase;less
B)increase;more
C)decrease;less
D)decrease;more

Question

Quizplus · Accepted Answer

The Answer is B

If the Possibility of a Default Increases Because Corporations Begin