Bonds with _____ default risk and ________ marketability have higher yield spreads.

Question

Quizplus · Accepted Answer

Bonds with higher default risk are considered more risky by investors and therefore require higher yield spreads to compensate for the additional risk. In addition, bonds with less marketability are less desirable to investors and may require higher yield spreads to entice buyers. Therefore, A is the best choice as it correctly identifies both factors that contribute to higher yield spreads.

Bonds with _____ Default Risk and ________ Marketability Have Higher

Bonds with _ Default Risk and ____ Marketability Have Higher