If a Company's Sales Begin to Fall Off So That

question 4

Multiple Choice

If a company's sales begin to fall off so that it is now more likely to default on its bonds than financial markets had previously believed, the yields on the company's bonds will

• A)rise to compensate investors for this greater risk.
• B)fall because the company will no longer be able to afford to pay as much interest.
• C)fall as investors insist on higher prices for the bonds to compensate them for the greater risk.
• D)be unchanged; once issued yields on bonds do not change.

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Definitions:

Hematocrit

The percentage of red blood cells in a volume of blood, used to diagnose and manage various medical conditions.

Hemoglobin

A protein in red blood cells that carries oxygen from the lungs to the body's tissues and returns carbon dioxide from the tissues back to the lungs.

Extravasation

Refers to the leakage of a fluid, often blood or drug solutions, from a vessel into the tissues surrounding it.

Hemochromatosis

A genetic disorder causing the body to absorb too much iron from the diet, leading to excess iron deposits in organs.