When a government partially defaults its debt,a "haircut" of 20% means that
A)creditors receive 20% of what they owed.
B)creditors receive 80% of what they owed.
C)creditors receive 40% of what they owed.
D)creditors receive 10% of what they owed.

Question

Quizplus · Accepted Answer

A "haircut" of 20% means that the creditors will receive 80% of what they are owed, since the 20% is being removed or "trimmed" from their original owed amount.

When a Government Partially Defaults Its Debt,a "Haircut" of 20