The Default Risk Premium Is Measured

question 88

Multiple Choice

The default risk premium is measured

• A)by an index published monthly by the Securities and Exchange Commission.
• B)by an index published monthly by The Wall Street Journal.
• C)as the difference between the yield on the security and the yield on a U.S. Treasury security of the same maturity.
• D)as the difference between the nominal yield on the security and the real after-tax yield on the security.

---

Definitions:

Researcher's Manipulation

The deliberate alteration of variables by a researcher in an experiment to determine cause and effect relationships.

Independent Variable

A variable that is manipulated or changed in an experiment to determine its effect on a dependent variable.

Dependent Variable

In an experimental setting, the variable that is being tested and measured, which is expected to change as a result of manipulations in the independent variable.

Independent Variable

In experimental and research settings, the variable that is manipulated or changed to observe its effects on the dependent variable.