When the economic conditions are weak,bonds with higher default risk become more susceptible.

Name: When the economic conditions are weak,bonds with higher default risk become more susceptible.
Brand: Quizplus
Rating: 4.9 (49 reviews)

Question

Quizplus · Accepted Answer

This is because weak economic conditions often result in a rise in the number of defaults, making bonds with higher default risk more vulnerable. Investors demand higher returns to compensate for the increased risk, which in turn drives up interest rates on these bonds and lowers their prices.

When the Economic Conditions Are Weak,bonds with Higher Default Risk