When economic and financial conditions suggest to investors that uncertainty has increased and business prospects are less robust, the market translates these opinions into lower default-risk premiums.

Question

Quizplus · Accepted Answer

When economic and financial conditions suggest to investors that uncertainty has increased and business prospects are less robust, the market typically translates these opinions into higher default-risk premiums, as the risk of default is perceived to be greater.

When Economic and Financial Conditions Suggest to Investors That Uncertainty