The factor that most likely results in corporate credit spreads widening is:
A) an improving credit cycle.
B) weakening economic conditions.
C) a period of high demand for bonds.

Question

Quizplus · Accepted Answer

When economic conditions weaken, there is an increased likelihood of default, resulting in a higher perceived risk of corporate debt, which leads to wider credit spreads.

The Factor That Most Likely Results in Corporate Credit Spreads