A company that continues to have strong profit performance during an economic downturn when many other companies are suffering losses or failing should see:
A) an increase in the yield of their bonds and the price of the bond increases.
B) their bond rating maintained or actually increase.
C) the demand for their bonds decrease and their yields decrease.
D) the demand and price for their bonds decrease.

Question

Quizplus · Accepted Answer

A company that continues to have strong profit performance during an economic downturn is considered less risky by investors, which leads to increased confidence in the company's ability to meet its obligations, including bond payments. As a result, the company's bond rating is likely to be maintained or even improved, which can lead to lower yields and higher prices for its bonds.

A Company That Continues to Have Strong Profit Performance During