During weak economic periods, newly issued junk bonds require lower risk premiums than in strong economic periods.

Name: During weak economic periods, newly issued junk bonds require lower risk premiums than in strong economic periods.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

During weak economic periods, investors perceive higher risks of default, leading to newly issued junk bonds requiring higher risk premiums to compensate for the increased risk, not lower.

During Weak Economic Periods, Newly Issued Junk Bonds Require Lower