If a company becomes less creditworthy,the market price of its bonds will decline.

Name: If a company becomes less creditworthy,the market price of its bonds will decline.
Brand: Quizplus
Rating: 4.8 (59 reviews)

Question

Quizplus · Accepted Answer

When a company's creditworthiness decreases, investors perceive it as more risky, and therefore demand a higher return on their investment in the form of a higher yield. As a result, the bond's market price will decline to bring the yield back up to what investors require.

If a Company Becomes Less Creditworthy,the Market Price of Its