One reason that comparative advantage may occur in debt markets is that fixed-rate investors could be less sensitive to credit risk than floating rate lenders and acceptors.

Question

Quizplus · Accepted Answer

Comparative advantage in debt markets typically arises from differences in access to information, transaction costs, regulatory environments, or risk preferences, rather than the specific sensitivity of fixed-rate investors to credit risk compared to floating rate lenders.

One Reason That Comparative Advantage May Occur in Debt Markets