The credit risk premium on an MNC's loans tends to be lower in the United States than in most other countries because the U.S. government stands ready to rescue failing firms.

Question

Quizplus · Accepted Answer

The credit risk premium on an MNC's loans is primarily determined by the firm's own financial health and market conditions, not by the expectation of a government bailout. While government policies and stability can impact overall lending conditions, there is no blanket policy where the U.S. government stands ready to rescue failing firms, and such rescues are not a primary factor in determining credit risk premiums.

The Credit Risk Premium on an MNC's Loans Tends to Be