A study done on the average return (after all costs and defaults were figured in) revealed that creditors lending to low-income nations:
A) on average earned substantially higher returns.
B) on average earned less than the return on less risky lending.
C) on average earned only a slight risk premium, overall just breaking even.
D) had on average negative returns.

Question

Quizplus · Accepted Answer

Creditors lending to low-income nations typically face higher risks, and the study suggests that they only earned a slight risk premium, which means they just broke even after accounting for costs and defaults.

A Study Done on the Average Return (After All Costs