During the Great Depression years 1930-1933 there was a very high rate of business failures and defaults,we would expect the risk premium for ________ bonds to be very high.
A)U)S. Treasury
B)corporate Aaa
C)municipal
D)corporate Baa

Question

Quizplus · Accepted Answer

During the Great Depression years 1930-1933, the risk of default for corporate bonds (especially lower-rated bonds like Baa) was very high due to the high rate of business failures. Therefore, the risk premium for corporate Baa bonds would be very high. The other options (US Treasury, corporate Aaa, and municipal) would not have experienced the same level of default risk during this time period.

During the Great Depression Years 1930-1933 There Was a Very